Canada: the land of e-commerce opportunity
For many years, the only thing that divided us from our American neighbours was our purchasing power. Not any more. The rising Canadian dollar has been a good news story for Canadians. It has gone a long way to leveling the playing field for Canadian consumers long used to paying a premium for shopping at home and down south.
It’s also launched an unprecedented online shopping spree among Canadians, according to an eMarketer report titled ‘Canada B2C E-Commerce: The Barriers Melt’ released in December 2007. While cross-border online activity has grown, the real surprise was the growth of Canadian e-commerce activity.1
This growth continues a good news story that began in 2001. According to Statistics Canada, the Canadian e-commerce market has posted double-digit annual growth since 2001, fueled largely by the growth of the broadband – high-speed – Internet market. In fact, online sales have doubled from 2003 to 2006, growing by 70% in 2006 alone. Statistics Canada figures give Canadian retailers a slight advantage. In 2005, 57% of the 49.4 million electronic orders were placed with Canadian vendors.2
For 2007, eMarketer estimates the value of online purchases to approach $16 billion. It’s a number that includes products and services, online travel booking, digital content downloads and event tickets.
What is most telling is the growth potential. In 2006, the Retail Council of Canada placed the value of the retail economy at $390 billion. By 2008, it’s expected to top $420 billion.3 Today’s online retailers are just scratching the surface.
All that potential is becoming easier to tap. Canadians are among the world leaders in broadband Internet usage. As of 2006, almost 8 million households had high-speed Internet access. In addition, Canadians lead the globe in surfing and online banking.
Online shopping habits bode well for retailers. While Canadians spend less online on average than Americans, Canadians lead the way in purchasing electronics, travel and event tickets. The retail product sector – clothing, music and videos, and gift items and toys – is where Canadians lag behind.
Where is the market headed? According to the eMarketer report, it’s up, up, up. If the growth trends continue, by 2011, online spending will more than double, reaching $37.2 billion.1
Though the Canadian e-commerce market is relatively small compared to the U.S., the Canadian marketplace has the essentials in place to capitalize on the opportunity: nationwide broadband Internet availability and Internet-savvy population. In addition, recently introduced anti-fraud measures will play a big part in attracting new online shoppers and online sellers. Security measures such as Verified by Visa™ – a service that confirms a cardholder’s authenticity, in real time, through the use of his or her personal password – are making online shopping safer than ever for Visa™ cardholders and online merchants.
While only 15% of Canadian retailers sell online, many retailers are adding e-commerce capability to their web sites. As businesses continue to add online shopping capability, Canadians will be ready to spend, spend, spend. Related Links
eSELECTplus e-Commerce
Anti-Fraud Tools
Verified by Visa
1 Source: Jeff Grau. Canada B2C E-Commerce: The Barriers Melt. eMarketer, December 2007.
http://www.emarketer.com/Article.aspx?id=1005672&src=article1_newsltr
2 Source: Statistics Canada.
3 Source: Retail Council of Canada. Adapted from data from Statistics Canada.
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