Expatriate Oasis.

Fledgling e-commerce companies target Peruvians abroad.

PERUVIAN HUSBAND AND WIFE E-commerce team Maria del Carmen Vucetich and Edwin San Roman aren't quitters. An early venture to sell cakes baked by Vucetich fizzled for lack of a surefire payment scheme, yet they're already deep into a second version of the site, www.tortasperu.com.pe, launched in May. Hardy pioneers, they lead a pack of entrepreneurs hoping to latch on to some 2 million Peruvians abroad who send money home, a potential US$1 billion annual bonanza compared to the measly $5 million now spent domestically on-line.

Credit cards are the key: Lima's Rosatel flower store chain invested in credit card technology and sales boomed. Javier Pardo, the general manager of Rosatel (www.rosatel.com.pe) says he first created a Web site as an advertising tool. Soon, however, he realized that there was money to be made over the Internet. Rosatel now earns $250,000 in Web sales, of which one-third comes from overseas customers. "We now have a solid client base, especially in the United States, and we have never advertised," says Pardo.

E. Wong, Peru's largest grocery store chain, meanwhile, launched a Web site late last year to encourage Peruvians abroad to send gifts home. The site, www.ewong.com, receives about 1,200 hits a month, according to Marco Suarez, who heads the Internet project. Suarez says only 1% to 2% of visitors purchase anything, but he is actively researching ways to expand his operation. Suarez says he expects this to happen once the chain invests in technology to process international credit cards.

Peru's principal department store, Saga Falabella, which includes Rosatel on its home page, launched its Web site--www.sagafalabella.com.pe--in November 1999. Since then, the store has registered thousands of monthly hits from both home and abroad, Saga Falabella says. The most sought after items are household appliances, CDs and perfumes. "Sales from overseas clients are still not that numerous, but they are increasing' says Natalia Uriarte, one of the store's six full-time Internet employees.

The slow lane. To be sure, Peru is hardly one of Latin America's Web hotspots. There are probably no more than a dozen e-commerce companies. There are just 2 million fixed telephone lines for a population of 25 million. Grinding poverty, meanwhile, makes owning a personal computer impossible for most Peruvians.

Yet e-commerce should get a boost as Peruvians gradually accept using credit cards to shop online, analysts note. "People are beginning to see that they have complete security when shopping online' says Percy Vier, an e-commerce expert at IBM in Peru.

In fact, despite deep infrastructure problems--less than 3% of Peruvians have PCs at home--people here are keen on joining the Internet economy "Our research shows that there is a willingness to shop online," says Jose Miro Quesada, who heads a new Internet provider launched by the Lima daily, El Comercio. "As the price of phone connections and PCs come down, I think you'll see spectacular growth."

Another boost is expected following installation of a Peruvian Network Access Point, an interconnection that links all Internet providers so users can reach any Web site regardless of their server. This technical advance should make Internet access much faster and perhaps stimulate e-commerce.

This time around, cake-moguls-to-be San Roman and Vucetich have an agreement with a U.S. company to process credit card orders. The company hires moms who work at home to make their products, giving them a kit with Internet instructions, recipes and a digital camera. Photos are taken as each cake is completed and then sent to the client as proof of delivery

San Roman says he expects business to pick up as soon as his fledgling company begins an advertising push in October, before the Christmas rush. Before long, he will have moms baking cakes in all of Peru's 24 geographical departments, he says. "Once our network is in place we will begin promoting the product in the United States where there are large Peruvian communities," he says. "I have no doubts about our success."