E-Retailers Stoking Latino Net Explosion

Jeffrey A. Stern and Marcelino Miyares Jr. are helping to script Act 2 of the Latino Internet revolution.

In a Westside office cramped with a budding staff, the pair work 14-hour days to build InternetMercado.com, among the first online shopping sites for Latinos.

First, a string of portals targeting Latinos in the U.S. and Latin America burst onto the “dot-com” scene, linking viewers with search engines, news and chat groups. Now, InternetMercado is among those pioneering the next generation of sites: auction boards, Web-casting and, most notably, e-commerce.

“Everything that is currently the norm in mainstream Internet is still in the infancy stage in the Hispanic market,” said Gene Bryan, president of HispanicAd.com, a site that tracks industry trends and Internet developments. “Obviously, e-commerce is the one that attracts everyone because of the success that Amazon.com has had in the past year.”

InternetMercado.com is shunning the Amazon model in favor of one with a decidedly Latin flavor. Designed to resemble a Latin American mercado in the town square, or zocalo, the bilingual site offers Spanish-language music programming in four Latin music styles. An exclusive line of animated greeting cards croon Latin serenades under moonlit balconies. And explanatory content helps users shop for computers, absorb trivia on Mexico’s highest-scoring soccer star and explore the works of Latin film directors. All the while, they are cajoled to click and buy.

“We want to create all kinds of reasons to come to InternetMercado other than ‘I want to buy a CD,’ ” said Stern, president and chief executive of InternetMercado Commerce Corp. and its publicly traded parent, Numex Corp.

The site also aims to bring more Latinos online: An agreement with ShopAcer, the e-commerce division of Acer America Corp., will set users up with a personal computer, complete with monitor, printer and Internet access, for $304.

Whether InternetMercado.com will take off remains to be seen: The company has raised $7.5 million--only the beginning of what it will need. And like nearly all Internet start-ups, it is firmly in the red. Neither is it the first e-commerce site to target U.S. Latinos: Massachusetts-based Espanol.com has staked that claim.

But InternetMercado’s approach is novel enough to win kudos from Latino market analysts. And in the free-for-all to deliver tailored sites to the rapidly growing world of Latino Netizens, InternetMercado is staking a claim.

“No. 1, the Hispanic market is the fastest-growing market in America,” said Guillermo Bron, president of Los Angeles-based Bastion Capital Corp., which took a 5% stake in InternetMercado last fall in exchange for $1.5 million in debt financing. “No. 2, we know the market very well and have tremendous confidence in the management team assembled by InternetMercado, and No. 3, we think they have a good business plan.”

Key to that plan is InternetMercado’s instant access to millions of potential customers across the country. InternetMercado.com launched last month, but Stern has other Spanish-language media holdings: three magazines and La Bolsita (Spanish for “the little bag”), a door-to-door marketing tool that delivers them to as many as 3 million homes in the country’s top 20 Latino markets.

The canary yellow bag looped around doorknobs carries corporate advertisements and product samples. It also holds Hogarama, a women’s home and health magazine; Mundo Deportivo, a men’s sports magazine; and, as of December, InternetMercado magazine, an educational primer on why and how to get wired. All will heavily promote the Web site.

The magazines are published by Numex subsidiary JSA en Espanol, which also controls La Bolsita. Numex is traded as a penny stock on the OTC Bulletin Board.

“We were always about making the Hispanic consumer smarter,” Miyares, president of JSA en Espanol, said. “Naturally, now that translates to the Internet.”

In addition to the Bastion financing and $3 million raised through a private placement last year, the company recently struck a deal for $3 million from Los Angeles-based Trust Company of the West.

Stern claims a long history in mainstream publishing in New York, where as president and publisher he prepared Details magazine for sale to Conde Nast. He returned to his native Los Angeles to launch Jeffrey A. Stern & Associates in 1990.

His top management team is versed in Latino marketing and media: In 1991, Miyares founded Tamayo-Miyares Advertising, a Los Angeles marketing communications firm specializing in the Latino market. The site’s vice president of creative services, Harry Abraham-Castillo, has 15 years of experience in Latin entertainment, including as head of programming and production for Telemundo. And the site’s vice president of sales and marketing has 18 years of Spanish-language broadcast experience.

“With the combination of La Bolsita, the publications and the kind of talent they’ve been able to recruit, they have all the tools to really make a difference,” said Arturo Villar, editor of the New York-based Hispanic Market Weekly. “Potentially, they are a force.”

Studies show Latinos coming online at record rates here and in Latin America as computer prices drop and incomes rise. A flurry of general interest portals catering to Latinos emerged last year, but niche content and e-commerce were sorely lacking. The last few months have seen a frenzy of launches to fill the gap.

First on the e-commerce scene last fall was Espanol.com, with an Amazon-style model that targets Spanish speakers in the U.S. and Puerto Rico with books, music, videos and some exclusive products such as a Spanish-speaking Barney. The company has raised $15 million in financing and partnered with Telemundo. And a marketing program launched this month has yielded 2,000 affiliate Web sites.

But others are stepping in to compete, and they are carving up the space with a finer blade: Los Angeles-based YaVas.com offers specialty Latino books and music. Decompras.com, based in Monterrey, Mexico, is targeting Mexican immigrants in California eager to buy products for relatives back home. Mexicans and Mexican Americans here send an estimated $5 billion to Mexico yearly. Now, some of that can be sent in the form of a washing machine, stereo or smaller-ticket items such as a Rugrats doll or pearl necklace.

Evanston, Ill.-based QueRico.com, a subsidiary of EthnicFoods.com, is targeting shoppers in Spanish and English with mostly edible specialty goods from Mexico, Argentina, Brazil and the Caribbean. Miami-based Fiera.com, an e-commerce site that targets Latin America, will unveil its U.S. Latino market strategy in March. And pan-Latino auction site Subasta.com, also Miami-based, is selling everything from low-cost kitchen appliances to public sculptures. One item posted on the site last week: the domain name https://www.super-tienda.com (“super store”) for $400,000.

Business plans for others are piling up at the door of venture capitalists.

Those emphasizing Internet shoppers in Latin America, Spain and Portugal are capturing plenty of U.S. attention: Brazil-based e-retailer Submarino.com last week announced its second round of financing: $71.3 million. The lead investor: New York-based TH Lee.Putnam Internet Partners.

“I’ve been in the online business since 1993. Even in the early days I haven’t seen anything like this frenzy,” said David Perez, co-founder of New York-based LatinForce.Net, which launched last month as an incubator to develop e-businesses targeting the Latino market here and abroad.

“Anything with U.S. Hispanics and Latin America and the Internet is just going crazy right now,” said Perez, whose own company has raised $18 million in financing.

Although some sites are focused on Internet users outside the United States, avoiding the complexities of bilingual, semi-assimilated Latinos here, analysts say the domestic market holds promise.

“No one has really penetrated the U.S. Hispanic market, so there’s still a lot of money to be made and lost, probably in the next 12 to 18 months,” said TH Lee Vice President Carlos Monfiglio.

Guiding Spanish-dominant Latinos into cyberspace will be key to market growth, he said. InternetMercado.com, which allows users to toggle between identical Spanish- and English-language sites, plans to help facilitate that through low-cost computer sales and its magazine, launched one month before the site.

The first issue featured educational articles on Internet service providers and modem speed and a guide to children’s sites. And in a self-promoting listing of recommended shopping sites, https://www.internetmercado.com is first, before Macy’s, Bloomingdale’s and Sears.

InternetMercado officials say their site offers culturally relevant fare unavailable elsewhere. The serenading greeting cards will soon be available as boleros and trios. Kiosks on health and religion are coming soon, including a virtual chapel and animated cards for each patron saint.

By focusing on culture--not just language--InternetMercado may be charting new ground.

“Most Hispanics online now are English-dominant or bilingual. . . . Are they going to mainstream sites or Hispanic sites?” HispanicAd.com’s Bryan said. “I think the Numex solution is probably more on the mark: to facilitate interactivity based on the cultural aesthetics of the Hispanic market.”

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Latino Net

Last year, a series of general interest portals burst onto the dot-com scene to serve Latino consumers. Now, specialty portals, e-commerce, auction and music sites are the newcomers. Here is a sampling:

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Specialty portals

SportsYA (https://www.sportsya.com): Miami-based Spanish- and Portuguese-language sports portal.

Loquesea.com (https://www.loquesea .com): New York-based youth portal with a lot of attitude, targeting youth here and in Latin America. Languages featured: Spanish, Portuguese and Spanglish.

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Commerce

Espanol.com (https://www.espanol.com): Wakefield, Mass.-based Spanish-language site selling books, music, videos and some specialty items. Targets primarily the U.S. and Puerto Rico with plans to expand.

InternetMercado.com (https://www.internetmercado.com): Los Angeles-based bilingual site featuring computer products, books, music, video and soccer, with kiosks on spirituality, health and financial services to follow.

Decompras.com (https://www.decompras.com): Monterrey, Mexico-based site, targeting Mexico and U.S. Guarantees delivery to any small town in Mexico. U.S. strategy is aimed at Mexicans and Mexican Americans here purchasing products for friends and relatives in Mexico.

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Auction

Subasta.com (https://www.subasta.com): Fort Laud- erdale, Fla.-based auction site serving Spanish speakers in the U.S., Latin America and Spain. With built-in currency conversion program.

MercadoLibre (https://www.mercadolibre.com): Argentine auction site, with separate sites targeting the U.S., Chile, Mexico, Uruguay and Brazil. In Spanish and Portuguese.

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Music

Dgolpe.com (https://www.dgolpe.com): New York-based site for finding, sampling and buying digital music, targeting U.S., Latin America and Europe. In Spanish, Portuguese and English. Musicians can post a free band home page.