COMMUNICATION-CHILE: Lag in E-Commerce Contrasts with Internet Boom

By IPS Correspondents Reprint | | Print |

Gustavo González

SANTIAGO, Jun 22 2001 (IPS) - Internet connectivity is enjoying exponential growth in Chile, which stands in sharp contrast to the slow expansion of electronic commerce and other expressions of the so-called “new economy”, according to a media research firm Starcom.

Chile, with a population of more than 15 million, has 1.8 million Internet users, 157 percent more than in 1999, says a Starcom report.

But the study adds that just 17.4 percent of cybernauts in Chile carry out purchases on-line – far below the 40 percent average of net surfers who spend money on the web in industrialised countries.

There are currently 429 million people worldwide enjoying access to the global information superhighway, according to a study published Tuesday by the Nielsen/NetRatings consultancy in the United States.

Of that total, 41 percent are in the United States and Canada, 27 percent in Europe, the Middle East and Africa, 20 percent in the Asia-Pacific region, and just four percent in Latin America.

In Latin America, Chile had the highest proportion of Internet users last year – 3.6 percent – while the corresponding proportion was 3.1 percent in Argentina, 3.0 percent in Brazil, and 2.3 percent in Mexico.

Projections based on current trends in Latin America indicate that by next year, the Internet connection rate will have grown to 4.4 percent in Chile, 4.0 percent in Argentina, 3.9 percent in Brazil and 3.2 percent in Mexico.

Chile will then lose its lead to Argentina, whose connectivity rate will climb to 7.6 percent in 2003, compared to 6.4 percent in Chile, 5.3 percent in Mexico and 5.2 percent in Brazil.

But “it is of no use to brag about a strong Internet growth rate if those who use that tool in Chile are stuck in the initial stage, characterised by the use of the web for sending e-mails, chatting on-line and obtaining information,” said reporter Iván Vejar, who specialises in the worldwide web.

The Starcom study, released Wednesday, shows that e-mail is the instrument most widely used by Chilean cybernauts, 58 percent of whom say it helps them keep in touch with their friends, and 51 percent of whom say it is more comfortable than the telephone.

The notion of a “virtual community” is picking up steam in Chile, through e-mail, on-line chat rooms, instant messaging, discussion groups, digital game rooms, the creation of personal web pages and websites, and a growing familiarisation with specific search engines, according to the report.

E-commerce, however, is lagging due to a number of factors.

A mere 17.4 percent of web-surfers interviewed in this Southern Cone country said they engaged in on-line purchasing, while only 18.4 percent said they thought they would increase their virtual shopping in the next six months.

There is a clear hesitancy to trust stores that only exist on- line, demonstrated by the fact that 60.1 percent of those who said they shopped on the Internet did so at traditional establishments, especially the so-called multi-stores.

A report by the Santiago Chamber of Commerce reported that as of November 2000, there were 366 businesses on-line in Chile, 157 of which belonged to the “old economy” or traditional establishments, and 209 of which emerged in the niche of the digital economy.

Vejar commented that the slow development of e-commerce in Chile was the result of a multiplicity of factors, such as users’ distrust of credit care payment systems and cultural resistance to catalogue shopping.

He warned that there were also supply-side problems, pointing out that it was not enough to post a website marketing certain products or services if the rest of the advantages of on-line shopping were not available.

“The study by the Santiago Chamber of Commerce found that just 50 percent of Chilean websites that accept on-line orders take on- line payment, and only 39 percent have safe transactions, including guaranteed electronic payment mechanisms,” said Vejar.

In addition, “11 percent of [Chilean e-commerce firms] set a minimum purchase amount, and only 18 percent offer lower prices than traditional stores,” he added.