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Aug 1, 2011 2:43:00 PM
Category: Ecommerce

Fewer than 18% of Canadian Companies Are Selling Online

While the % growth of on-line sales took a dramatic increase during the 2012 Christmas season, the actual number of Canadian companies taking advantage of this growing trend is quite low.  Total sales during this period were $42 billion dollars and on-line sales amounted for $2.8 billion dollars or approximately 6.5% of that total.

On October 5, 2011, the Canadian House of Commons Standing Committee on Industry, Science and Technology conducted an extensive, in-depth analysis of Canadian e-commerce titled – ECommerce in Canada: Pursuing the Promise. 

Michel Bergeron, Vice-President, Corporate Relations, Business Development Bank of Canada had this to say about Canadians acceptance of the Internet.

First is the trend, and here a striking 93% of Canadian SMEs are connected to the Internet. They do not use it for everything, though. Most of the use they make of it, about 70% to 75%, is for banking and buying provisions. Far fewer use it to sell their goods and services online; in fact, only 18% of those surveyed did so. Even fewer, 15%, use it for marketing purposes.

While this obviously represents a challenge, it also represents an even bigger opportunity.  To further underline just how big that opportunity is, Forrester research has predicted that by 2016 on-line shopping will increase by as much as 62%.  In Canada, that could mean over $5B in sales.  But that’s nothing compared to what’s coming.  We’ll be at the tipping point in the blink of an eye.

What’s the tipping point?  The tipping point is when enough people get on board  and on-line business becomes the norm.  It’s the point when more than 50% of business is done on-line.  Don’t think that will ever happen?  Just look at the next generation.  They’re texting each other even when they’re in the same room!  For good or bad, on-line business is here to stay and at least 82% of Canadian businesses better figure out their priorities when it comes to the kind of systems they will need in order to survive.  For those who have moved to e-commerce but not seen the benefits maybe its time to review the tools you use.  To the brave souls who paved the way  and are reaping the benefits today – congratualations.

If that’s not enough to scare you, another report by Forrester Research concludes that U.S. e-tailers are becoming better positioned to steal (their words not mine) web revenues from homegrown companies.  It goes on to say that “in the eyes of the consumer, the downsides of buying from a U.S. based retailer rather than a domestic Canadian retailer are diminishing.  Canadian retailers should be shaking in their boots”.  Furthermore the report says that 25% of on-line spending by Canadians already goes through international web-sites.  The data suggests Canadian Shoppers are growing increasingly comfortable with cross-border shopping.

If it’s happening at the consumer level, you can bet that it’s safe to assume, the same thing is happening in the B2B market when retailers buy from distributors, distributors buy from wholesalers and wholesalers buy from the manufacturer or whatever.  Location doesn’t apply in cyberspace.  Just the value you provide.