Hurdle Jumping in Latin America

eMarketplaces will thrive in Latin America once they clear hurdles says new IDC report

FRAMINGHAM, MA. /PRNewswire/ -- The explosion of business-to-business Internet commerce has reached Latin America in the form of emarketplaces. Latin American start-ups and traditional brick and mortars are in the process of launching numerous initiatives to seize the opportunity presented by emarketplaces.

"IDC views the emergence of emarketplaces as a strategic trend that will dramatically transform the competitive landscape in the region and accelerate ecommerce activity," said Anna Giraldo Kerr, research manager for IDC.

Although IDC is optimistic about the future of emarketplaces in the region, the technology market research firm warns many obstacles must be overcome before rewards can be reaped from this revolutionary concept.

"eMarketplaces are in an embryonic stage," said Annika Alford, research director for IDC. "They will have to overcome several challenges to become the key dis-intermediary agents we believe the market needs."

According to IDC, one challenge emanates from the strong looming competition emerging from within the region. "Latin America-specific emarketplaces of similar vertical or horizontal specializations are popping up throughout the region and will pose significant competition to each other," Alford said. "The resulting battle to bring in the Latin enterprise and establish a strong client base, and the growing focus on the region among U.S.-based players will help to usher in a period of acquisition and consolidation within the region similar to that seen in the region's ISP market in 1999."

This competition will also bring about a strong need to localize services. "The absence of localization will result in lower perceived value-add among prospective e-marketplace participants," Kerr said. "However, the need to focus on localized services may prove too costly in a market that spans multiple small country markets and where capital is tight."

Once the market does overcome the hurdles it faces, however, the rewards will be plentiful.

"The greatest benefit and opportunity of e-marketplaces is their ability to bring e-commerce to the slower technology adopters in each country throughout Latin America, " Kerr said. "By doing this, e-marketplaces will play a significant role in driving Latin America into the new economy."