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  1. Electronic Commerce In Latin America Lucas GravesJupiter Communications “Latin America: Clicks and Mortar”LABA, Stern School of Business6 October 2000

  2. Landscape: “Caveat Emptor” Hinders Electronic Commerce

  3. Three Key Obstacles to Online Commerce in Latin America Consumer Attitudes FulfillmentChallenge Payments Problem

  4. Health Daily News 79% Research for Work 79% 62% Research for School 60% Online Banking 59% Research Products and Local Content 58% E-mail 57% 49% Travel Information 46% Personal Web Page 45% Sports Uh oh. Research for Financial 44% Weather 41% Games 35% Chat 34% 33% Online Trading 13% Purchase Goods Online 0% 20% 40% 60% 80% 100% Online Shopping Holds Little Appeal for Future Users 83% Percent of Respondents “Interested” or “Very Interested” in Each Activity If They Had Internet Access Source: Jupiter Consumer Survey,(5/00); n=125

  5. Respondents Who Respondents Who Are Have Internet Very Likely to Get All Respondents Access at Home Internet Access 12% 22% 48% 52% 77% 88% Own Credit Card(s) Do Not Own Credit Card(s) Credit Card Challenge Less GraveOnline Source: Jupiter/IBOPE Consumer Survey,(11/99); n=1200

  6. 100% 90% 80% 70% 60% 50% 40% Very 30% Somewhat 42% 20% 10% 7% 7% 7% 0% Safe Unsafe Payment Fears Pose Serious Problem in Latin America “How Safe Do You Think It Is to Use a Credit Card to Buy Things Over the Internet?” Source: Jupiter/Ibope;(5/00) n=1200

  7. Weight of Brick-and-Mortar in Latin America

  8. Outlook: Barriers to Online Commerce Will Give Way

  9. $10 100% $9 $8 80% $8.3 $7 $6 60% $5.8 $5 34% $4 40% 31% 27% 24% $3 21% 18% 13% $2 20% $3.7 $2.2 $1 $0.5 $0.2 $1.2 $0 0% 1999 2000 2001 2002 2003 2004 2005 Consumer Online SpendingReaches $8.3 Billion in 2005 (in billions) Total Online Spending Percent of Online Buying Source: Jupiter Internet Commerce Model, 02/00

  10. 20% 24% 34% 40% 49% 57% 23% 27% 26% Newbie Intermediate Veteran Tenure Holds Back Online Shopping in Latin America Latin America United States Western Europe Source: Jupiter Internet Commerce Model, 02/00

  11. Site Efforts Will Capitalize onRising Tenure Online Tenure Site Shows Advantages $ Buyers Browsers Site Builds Trust

  12. Online Advantages Translate Into Loyalty Bonus First Online Transaction Online Advantages: Convenience, Returns Loyalty Mistrust of New Channel Time / Transactions Online Retail Off-line Retail

  13. Cross-channel Quick Fixes Won’t Prove Sustainable drive traffic in-store returns supplier leverage trust boost in-store pay in-store pick-up low high high low Initial Value Sustainability

  14. Mandate: Win Consumer Confidence Online

  15. Customer Service Combines Benefits and Reassurance Customer Service Communicating Benefits Communicating Safety Convenience Fraud Protection Privacy Policy Accessibility Return Guarantee Price Encryption Live Assistance Selection Security Audits / Seals Customization Rich Information Entertainment

  16. Returns Lead the Customer Service List In Latin America • Simple, generous return policies: • In-store returns via retail partnerships • Free shipping for returns • No questions asked • Say it loud

  17. $ $ $ $ Build Trust and Win Loyalty With Credit Card Owners Loyalty Opportunity Ease of Conversion $ Has CreditCard Shops Online Shops WithCredit Card

  18. Support Alternative Payments but Encourage Credit Cards • Drive credit card transactions: • Link to loyalty programs • Independent / supplemental fraud protection • Phone orders

  19. Thank you. lucas@jup.com