FORT LAUDERDALE, FLA. (05/30/2000) - Eight-hundred pound gorillas continue staking out territory in Latin America's Internet market, hoping to profit eventually from a market that today is too small and too crowded.
México's Grupo Televisa S.A., a Spanish-language media giant that recently launched a general-interest portal for Latin America, today announced it has partnered with a distributor of pharmaceutical products to launch a site devoted to health and beauty.
The portal, to be launched in the third quarter of this year, is called Estarbien.com, which in Spanish means "to be well." Televisa's partner in the venture is Grupo Casa Saba SA, a 108-year old Mexican distributor of medicines, health and beauty products, publications, food, office supplies and other products. Casa Saba was known previously as Casa Autrey.
Estarbien.com will provide information and sell products about health and beauty, the companies said. The portal will face competition from several companies that are already targeting this online market in Latin America, including Farmaciaonline.com and Salutia MedicoUno Network.
Aside from a crowded competitive landscape, Televisa's health portal will also face another challenge: making money in a small market. Last year, there were 10.6 million Internet users in Latin America -- about 2 percent of the region's population -- and they generated only US$194 million in business-to-consumer online sales, according to New York-based market research firm Jupiter Communications Inc. Those counting on making money by selling advertisements online in Latin America will have to split an estimated $150 million pie this year, according to estimates from U.S. financial analyst firm Salomon Smith Barney Inc.
Like the many other new and established companies playing in Latin America's Internet market, Televisa and Casa Saba are betting that the market will grow as projected in the coming years. By 2005, there should be 66.6 million Internet users in Latin America, and they're expected to generate $8.3 billion in business-to-consumer online sales that year, according to Jupiter.
However, unlike most cash-starved startups, Estarbien.com is supported by two companies with very deep pockets. Televisa is the world's largest Spanish-language media company, with revenue of US$1.69 billion, net income of $76.9 million and 15,400 employees in 1998, according to the most recent figures available from Hoover's Inc. Casa Saba, México's largest wholesaler of pharmaceuticals, had revenue of $1.19 billion and net income of $9.5 million in 1998, according to Hoover's.
Televisa's stock (TV) was trading at $55.12 per ADR (American Depositary Receipt) on the New York Stock Exchange this afternoon, up $3.44 from yesterday's close. Casa Saba's stock (SAB) was trading at $8 per ADR this afternoon on the New York Stock Exchange, up 12 cents from yesterday's close.
Televisa, which owns radio and television stations, record labels, publications, and produces and distributes films, launched a Spanish-language Web portal in February called Esmas.com, which in Spanish means "It's more."
The portal can be found at http://www.esmas.com/.
Some of the companies competing in the region's Internet market include Microsoft Corp., Spain's Terra Networks SA, Brazil's UOL Inc., Yahoo Inc., America Online Inc., Brazil's Globo Cabo SA, México's Teléfonos de México SA, StarMedia Network Inc. and Yupi Internet Inc.
Televisa, in México City, can be reached at http://www.televisa.com/. Casa Saba, also in México City, is at http://www.autrey.com/.