1. Some Elements for an E-Commerce Strategy for Latin America and the Caribbean Juan Fernández González Member of the United Nation ICT Task Force Coordinator of the Cuban Commission of Electronic Commerce Ministry of Informatics and Communications Republic of Cuba

2. 2001 Telecommunication Indicators per 100 inhabitants Tel. Cell PC Internet Tel. Cell PC Internet lines Phones owners users lines Phones owners usersNorth America 67 43 60 49 LA & the Caribbean 16 15 5.4 5 4 3 11 10 times 4 3 11 10 times less less Source: ITU

3. Internet and e-commerce in Latin America and the Caribbean 25.3 million Internet users in 2002 25.3 million Internet users in 2002 That is 4.6% of the world total of 544.2 million That is 4.6% of the world total of 544.2 million Is predicted that it will grow at a 32 - 41% through 2003. Is predicted that it will grow at a 32 - 41% through 2003. Total e-commerce revenue in Latin America will grow from $3.2 billion in 2000 to $15 billion by 2003 Total e-commerce revenue in Latin America will grow from $3.2 billion in 2000 to $15 billion by 2003 But it will only amount to 1% of the world's $1.4 trillion in e-commerce revenue by 2003. But it will only amount to 1% of the world's $1.4 trillion in e-commerce revenue by 2003. Latin America and the Caribbean has the 8.6% of the world population and the 6.4% of the world GDP. Latin America and the Caribbean has the 8.6% of the world population and the 6.4% of the world GDP. Source: eMarketer; IDC; eTForecast; UN Population Fund

4. How E-Commerce is helping the local economies Source: IDC; Atlas Web-Based User Survey Purchases Purchases Purchases Purchases in local sitesin foreign sites in local sitesin foreign sites United States: 90% 10% Europe: 59% 41% Asia Pacific: 35% 65% Latin America: 26% 74%

5. Barriers for the growth of Internet and e-commerce in LA & the Caribbean Internet access costs Internet access costs Relatively small number of credit cards Relatively small number of credit cards Inefficient fulfillment mechanisms Inefficient fulfillment mechanisms Only 10 to 15 percent of the population have the resources to actively use the Internet and shop online Only 10 to 15 percent of the population have the resources to actively use the Internet and shop online Source: eMarketer; Jupiter Communications

6. The linguistic barrier Sources: Global Reach; Vilaweb.com Speakers % World % Online% Web Speakers % World % Online% Web Languagein the worldpopulation populationpages English:567 millions 9% 40.2% 68.4% Spanish:350 millions 6% 7.2% 2.4% Portuguese:176 millions 3% 2.6% 1.4% French: 77 millions 1.3% 3.9% 2.9%

7. The first conclusions The situation of Latin America and the Caribbean is different from North America The situation of Latin America and the Caribbean is different from North America Nevertheless there are some common trends and developments Nevertheless there are some common trends and developments Therefore the E-Commerce Strategy for Latin America and the Caribbean has to take this facts in consideration Therefore the E-Commerce Strategy for Latin America and the Caribbean has to take this facts in consideration Although the region has similar problems, each country has to define its own Strategy based on its particular characteristics Although the region has similar problems, each country has to define its own Strategy based on its particular characteristics

8. The task of regulators Government involvement and support To build the proper infrastructure: Telecomm infrastructure Telecomm infrastructure Service infrastructure Service infrastructure Legal and Regulatory infrastructure Legal and Regulatory infrastructure To train and educate: In the development of applications In the development of applications In the marketing and managerial aspects In the marketing and managerial aspects

9. How to face these barriers? Adapting to the circumstances: Installing Internet terminals in public locations Installing Internet terminals in public locations Introduction of alternative (and cheaper) devices such as set-top boxes Introduction of alternative (and cheaper) devices such as set-top boxes Introduction of innovative payment systems (smart cards) Introduction of innovative payment systems (smart cards) Introduction of wireless technology (WAP, G3, WLL, etc.) Introduction of wireless technology (WAP, G3, WLL, etc.)

10. To B2C or to B2B? That is the question B2C: To increase the input to the local economies Through the export of indigenous goods and services Through the export of indigenous goods and services In the Caribbean: Targeting the tourists In the Caribbean: Targeting the tourists Increase and diversify the flows of remittances Increase and diversify the flows of remittancesB2B: To increase the efficiency of the local economies Lowering the cost of the supply chains Lowering the cost of the supply chains Inserting local enterprises to the global markets Inserting local enterprises to the global markets

11. The wealth of local content Latin America and the Caribbean has a very rich cultural and historical heritage For example: Music Music Local customs and traditions Local customs and traditions Hand crafted goods Hand crafted goods Tourist destinations Tourist destinations The support for the creation of Web sites with local content should have the highest priority in the public and private sectors

12. Helping the local enterprises Financing Financing Adapting the regulations Adapting the regulations Coaching (incubators) Coaching (incubators) Enrolling various factors Enrolling various factors Matchmaking Matchmaking International collaboration International collaboration Collaboration “south - south” Collaboration “south - south”

13. Thank you For more information please contact: Juan Fernández Member of the United Nation ICT Task Force Coordinator of the Cuban Commission on E-Commerce Ministry of Informatics and Communications Republic of Cuba juan@mic.cu