News

USIS Washington 
File

02 June 1999

HUGE INCREASE PREDICTED IN LATIN AMERICAN INTERNET USE

(Growth of 485 percent in region expected by 2000)  (660)
By Eric Green
USIA Staff Writer

WASHINGTON -- The number of Latin American Internet users is expected
to grow to 34 million people by 2000, a 485 percent jump since 1997,
says the chief economist of a firm that provides financial services
and information in Latin America.

At a June 2 press conference, Gregory Keough, founder of Zona
Financiera, said that figure compares to the 72 million people in the
United States now using the Internet, and 250 million worldwide. He
noted that the IBM company projects a 50 fold increase in the use of
the Internet for transactions in Latin America from $200 million today
to more than $10,000 million a year in 2003.

Keough said Internet use is at the "beginning of the curve" in growth
penetration in Latin America. This means, he said, that only about
five percent of the homes and seven percent of the businesses in the
region have personal computers, which is considered a key to allowing
people to go on-line.

Keough, who was the subject of a feature article in the May issue of
Forbes Magazine for starting Zona Financiera in 1997, said Internet
use in Latin America is growing because it allows people there for the
first time ever to "comparison shop" for products on-line. His
company, headquartered in Falls Church, Virginia, with offices in five
Latin American countries, offers a place where Spanish and
Portuguese-speaking users of the Internet can comparison-shop for a
mortgage, a car loan or insurance, as well as check stock quotes and
financial news.
 
Previously, Keough said, if someone wanted to get the best deal on a
mortgage loan or obtain interest rate information from a bank, it was
necessary to call or go to every single bank for that information. On
the Internet, however, a person can comparison-shop at the click of a
mouse switch. In addition, he added, the Internet allows people to
transact a loan on-line.

Keough said surveys show that Internet users in Latin America average
about age 29, and the average Internet user is on line about 9.7
percent of the time per week, which is less than in the United States,
but three hours more than in Europe. Some 76 percent of the users are
employed, he said, which is "good news" because that means they
usually qualify for financial service products. Another key statistic,
he said, is that 83 percent own a credit card, allowing a customer to
purchase products on-line.

Surveys also show, he said, that 71 percent of Latin American users
have been on-line for over a year. That means, Keough said, that Latin
Americans "are getting on-line and staying on-line. They're not trying
out" the system and then abandoning it.

But perhaps the most "astounding" statistic, he said, is that almost
30 percent of Latin American Internet users have made a purchase
on-line.

"That's pretty incredible," he said, "because in the United States it
took us a long time to get up" to that number. "I think it goes to a
basic fact that we've seen" about Latin American consumers -- that
they are twice as likely to transact a purchase on line than consumers
elsewhere in the world."

Keough said that internet growth "presents opportunities" for Latin
America in allowing countries of the region to rapidly interact with
each other and with other parts of the world in sharing information
and resources."

Keough noted that not all parts of Latin America demonstrate the same
rate of increase in Internet use. Brazil, Mexico, Argentina, Chile,
Colombia, and Venezuela have the fastest growth rates, he said, but
noted that other countries, such as those in Central America, "are not
lagging that far behind." Internet use in Central America is at about
250,000 people, with Costa Rica making up the bulk of that figure.