For many years, Canadian businesses were slow to adopt online business and marketing. The past ten years have seen more growth in internet adoption, but digital technology as a whole has continued to lag behind other developed countries.
It took a pandemic to force businesses in this country to utilize digital tech and the internet, or face ruin. Now that they’re seeing positive results, many are wondering why they didn’t get comfortable in the virtual business world much sooner.
Canadian Business Use of the Internet
It comes as no surprise that ecommerce sales in Canada have skyrocketed over the past couple of years. More Canadians shopped online and more businesses had to meet them there. Canadian ecommerce sales grew by about 30 percent to $398 billion in 2021, compared to 2019 data from Statistics Canada.
The big surprise was business-to-business transactions outpaced business-to-consumer retail sales online. The manufacturing sector cornered almost a quarter of all ecommerce sales at $105 billion, with wholesale following at $77 billion and transportation/warehousing taking $51 billion.
Still, the retail sector grossed $35 billion in ecommerce sales, an impressive increase of almost 60 percent. Thirty-three percent of Canadian businesses made some sales online in 2021.
Large businesses are more likely to be online and made more ecommerce sales, but smaller businesses came closer to their success than one might expect. Thirty-six percent of medium-size businesses and 32 percent of small businesses reported online sales. Large businesses (38%) were the most likely to report ecommerce sales, while medium (36%) and small (32%) businesses did not trail far behind.
- The average amount Canadian businesses grossed through ecommerce sales was $3.7 million in 2021
- Large businesses made $79 million on average
- Medium-sized businesses made an average of $4.2 million
- Small businesses made $580,000
Most reports revolve around ecommerce and online sales, and there is certainly room for that to grow in this country. Recent events have accelerated that growth as companies acknowledge its importance, at least as a backup plan.
However, Canadian businesses have fully embraced the internet for growth in other ways. Most have a website now, even if it isn’t a point of sale. Online advertising (in its many forms) has been tested and verified as a critical part of an effective marketing strategy.
The majority are also present on social media because that’s where online Canadian consumers love to hang out. Experts predict over 96 percent of online Canadians (38.18 million) will be on social media by 2026.
89 percent of Canadian businesses continue to build a presence online in a variety of ways:
- They spent about $6.5 billion on online ads
- 78% have a company website (59% are mobile optimized)
- 61% have social media accounts
- 19% use email marketing
Info & Communication Tech Used by Canadian Businesses
- Company-wide computer network 53%
- Software not specific to this business’s industry 49.4%
- Industry-specific software 45.5%
- Cloud computing 45.3%
- Internet-connected smart devices, or Internet of Things (IoT) 22.2%
- Customer relationship management (CRM) software 17.2%
- Open source software 13.6%
- Electronic data interchange on the Internet 11.2%
- Enterprise resource planning software 6.9%
- Software and hardware using artificial intelligence (AI) 3.7%
Source: Statistics Canada. Table 22-10-0117-01 Information and Communication Technologies Used by Industry and Size of Enterprises
Businesses that launched in recent years are much more likely to use the internet and other digital technology for their business. In fact, a growing number of businesses are entirely internet-based. It’s part of the reason why these modern business owners are confident and optimistic about their future.
“Despite talks of a looming recession and rising inflation, the majority of [Canadian] entrepreneurs who started their business over the last two years are optimistic about the success of their business (90 percent) and feel prepared for the future (85 percent),” found a recent Intuit QuickBooks / Angus Reid study. “And they have good reasons for feeling this way, including growth within their industry (49 percent), an increase in sales over time (41 percent) and comfort using modern tech tools to run their business (38 percent).
What’s Next?
As Canadian businesses grow more comfortable with the internet and digital technology, they’ll gain more confidence in the opportunities it provides. Integration with their offline presence is the next urgent step for those who also operate offline, naturally moving them into multi-channel sales. Whether they’re doing business offline or online, the metaverse will be their next big challenge in their digital transformation.
Artificial Intelligence (AI) technology will creep in as it’s developed. Canadian businesses have been slow to adopt AI tech. Twenty percent of large businesses are using it though, and 17 percent of businesses in the utilities sector have adopted it as well. Machine learning and workflow automation tech were used most.
Has your use of the internet and related digital tech grown over the past couple of years? Please share your experience or questions in the comments below, or join us in the Online Business Canada Facebook group.
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Melody McKinnon is an internet entrepreneur with 25 years of experience in a wide range of online business models, backed by a formal business education and enhanced by training and mentorship. She has owned or managed both educational and ecommerce websites. Her book, 7 Recession Proof Online Businesses to Start From Home, is available from all major ebook retailers.
Melody has worked with many businesses & brands in a multitude of capacities. She can often be found on CanadianDigitalMedia.com, CanadiansInternet.com, CanadianFamily.net, and AllNaturalPetCare.com, as well as other quality digital publications. Her content has earned reference links from highly-respected websites, magazines and university textbooks.
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