A Growing Online Market, Eh?

In 2007 the Canadian retail ecommerce only totaled about 12.9 billion USD, but over the next three years that number is predicted by eMarketer to grow by more than 10% annually. With Canadian business-to-consumer (B2C) ecommerce on the rise there is room for retailers and online store owners to get a piece of this rapidly expanding pie. But before you run out and begin marketing to Canadian consumers or developing a Canadian version of your site you will need to understand a few things about the Canadian market:
  1. It Is Small
    As Jeffrey Grau, eMarketer Analyst, explains- “Until Canadian consumers show a larger appetite for buying big-ticket physical goods online, such as home furnishings and consumer electronics, the Canadian e-commerce market will remain small compared with other G-7 countries.” The Canadian market has traditionally been seen as the little brother of the French, German, Italian, Japanese, British, and American markets.
  2. Physical Location Is Paramount
    While Canadian consumers are as likely as American consumers to go online and do product research, they are much more likely to purchase the item at a physical location. In fact, one important reason Canadians go online to retailer sites is to find store locations.
  3. The Cost Is Higher
    There are not nearly as many Canadian ecommerce sites as American ecommerce sites because the cost of operating a Canadian site is about ten times higher for their respective market.
  4. The Tax System Is Prohibitive
    The Canadian tax structure for online retail purchases reduces some of the cost advantage that Canadian consumers would otherwise enjoy shopping online instead of in-store.
  5. They Buy From Their Own
    Canadian consumers would rather buy from retailers indigenous to Canada compared to foreign companies- even US based businesses that are still in close proximity.

Given the specifics of the Canadian ecommerce market, businesses in the best position to benefit from its expansion are Canadian-founded or Canadian-based businesses that can offer online selections, as well as a retail purchase location. The trend over the next few years will be a steady increase of Canadian retailers and small Canadian businesses in all industries opening online stores to tap into the steadily growing Canadian market and already booming American market to their south.

Looking to start a Canadian online business? Contact Volusion’s sales team today.

-Kate Pierce eCommerce Specialist

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