BRICKS AND CLICKS.

E-COMMERCE RESONATES AS LATIN AMERICXS BUSINESS catchword. Retail websites are surfacing. Banks are scrambling to boost online services. Multinational corporations are joining forces to centralize their supplier and logistics operations. Even cosmetics makers are banking on a bottom-line facelift from the web.

The Digital Revolution: where only the savvy survive.

With all this movement, is the e-com frenzy actually paying off?

Yes and no.

Latin America's e-commerce promise is slowly becoming reality, with Brazil accounting for more than 60% of the region's digital business, according to a PricewaterhouseCoopers study. The Internet is forcing the region's executives to rethink how they run their companies--both in their business-to-business operations and in developing business-to-customer relationships. In response, players are scrambling for position so they'll be ready when Internet growth explodes, as predicted, on the back of personal computer giveaways, free Internet service, lower telephone rates and the incursion of wireless Internet use.

Just how these first-on-the-bandwagon industries structure their Internet relationships could hold tips--and warnings--for companies following in their wake.

The biggest business shake-up is emerging at the business-to-business level. Researchers at Gartner Group say such commerce in the region reached US$1 billion in 1999 but should swell to $124 billion by 2004.

"The growth in B2B in Latin America is phenomenal," says senior consultant Mark Ludwig at PricewaterhouseCoopers. "It is truly a paradigm shift."

Many manufacturers have already taken some of their operations digital, setting up elaborate online marketplaces where they tap first-tier suppliers, who in turn link to second-tier suppliers. The auto industry led the push globally when it created what could be the world's largest online firm, a digital supplier chain it hopes will save $500 million annually in procurement costs.

"The Latin American demand for B2B e-commerce services is larger than the supply," says Claudio Senise, sales and marketing manager for Dow Chemical in Brazil which, in August, is launching a Latin American e-commerce program. Thirty Dow customers in the pilot project will have online access to a bevy of services, including the status of their orders and their account history. The system also allows for automated inventory monitoring and resupplying.

Such systems not only promise to dramatically boost efficiency, they are opening the playing field to small and mid-sized companies in the region. But there's a make-or-break caveat: companies that balk at jumping aboard the e-commerce bandwagon may be sentencing themselves to death.

While the bricks-and-mortar companies proceed slowly, the financial sector is zooming to take advantage of the Internet. Bradesco in Brazil has led the e-vanguard, revolutionizing its services to segue with the public's traditional demands. The bank is expanding its tentacles into B2B procurement activities, building broadband access with Globo Cabo and setting businesses up on the web. Bradesco's efforts have triggered a free Internet access barrage in Brazil.

Years of hyperinflation in Brazil fostered demand for fast transactions and instant access to financial information. The Internet fills the bill perfectly. In Mexico, meanwhile, online banking alleviates the painstaking process of waiting in lines. But banks themselves have the most to gain from the techno-revolution.

Because they save bundles of money by getting people online, the financial institutions are tripping all over themselves to find gimmicks that will lure their customers into the electronic universe. Through some Latin American bank websites, clients can access everything from the latest sports scores to the balance on their electricity bills. With a keyboard click, they can also upgrade insurance, pay income tax and apply for loans.

The key challenge for banks will inevitably lie in striking a balance between bricks and clicks--that is, traditional branch banks and virtual banks. Banks are tacking the dearth of home computers by setting up public computer kiosks.

Some banks are even offering online shopping, moving into the e-retail sector where the widest front-line sweeps are being recorded by websites offering small, easy-to-ship consumer items. Books, CDs and videos are getting the most attention, but other niche markets are hovering on the horizon.

Still, having a product to sell doesn't guarantee Internet success. The cosmetics industry offers a cautionary tale about how what appears to be a safe bet--small, easy-to-ship items--can prove risky in retail unless the peculiarities of the market are assuaged. As the Internet frenzy continues and online companies face tests in their respective markets, the bodies of dead dot-coms are going to stack up fast. It will be a Darwinian world where only the savviest survive.