Canadian businesses with a staff of five or more grossed $305 billion in online sales in 2019. If you believe the pandemic predictions and projected growth, that number should double by 2023.
In 2019, Canadian small businesses were still in their ecommerce infancy. Some were embracing online sales in one form or another, be it their own website or through an online marketplace like Amazon or Etsy. The majority, however, remained stubbornly offline. Of the $305 billion dollar total, the retail trade sector only grossed $22 billion.
Canadian consumers, on the other hand, are big fans of online shopping and have been for several years. They love the convenience and variety offered in cyberspace. Additionally, many Canadians are isolated or miles away from the nearest city. The internet opened up a whole new world for them.
One of the best things to come out of this pandemic, is an appreciation for small businesses and how important they are to the Canadian economy. While they have expressed a desire to ‘buy Canadian’, many consumers were forced to spend their money across the border. There simply wasn’t an online Canadian source of the product they were searching for.
Then, Everything Changed
In 2020, small retailers who weren’t selling online learned a tough lesson. Ecommerce isn’t just an optional method of increasing sales, it’s part of a contingency plan made for today’s world. It’s also a stand-alone opportunity for people who want to start a business, no matter where they are or what challenges they face. The pandemic has resulted in a national revelation that has rapidly accelerated online business in Canada.
“Retail e-commerce sales are on track to reach record levels in 2020 as new measures aimed at slowing the spread of COVID-19 have significantly affected how consumers make retail purchases,” says a Statistics Canada survey report. “Statistics Canada previously reported that retail e-commerce sales more than doubled from February to May 2020, to a record of almost $4 billion in May.”
Once these retailers are selling online and Canadian consumers find them there, national online sales will grow exponentially. Perhaps even more exciting, are the opportunities for growth that come from access to a global market. In 2019, 98 percent of businesses that sold online had Canadian customers. Twenty-two percent sold to American consumers and 11 percent sold products in countries outside of North America.
Now, Canada is poised to take its place on the global stage as a thriving digital economy. That will mean big changes in the coming years.
Canadian Ecommerce Statistics
- 25% of all Canadian business with 5+ employees had some online sales.
- 39% of large businesses (100+ full-time employees) reported online sales.
- 34% of medium-size businesses (20 to 99 full-time employees) reported online sales.
- 23% of small businesses (19 or less full-time employees) reported online sales.
B2B (business-to-business) sectors were major contributors to the total online sales, especially companies involved with the supply chain.
- Wholesale companies brought in $85 billion.
- Transportation and warehousing followed at $60 billion.
- Manufacturing accounted for $38 billion in online sales.
We’ve seen growth in related businesses as well, most notably in shipping & fulfillment.
Conducting Sales Online
The need to be visible online is largely understood by Canadian businesses in 2020, with 86% saying their company is online in some form. While 77 percent of respondents have a company website, most didn’t sell products through it. Fifty-seven percent of businesses say they have a social media account and 23 percent pay for online advertising.
- 70% of Canadian businesses that made online sales, used a company website in 2019.
- 36% used a third-party website, platform, app or online marketplace.
- 14% made sales on a social media network, with small businesses being slightly more likely to do so at 17%.
- 11% used their company app.
Of the businesses who have social media accounts, 86 percent said it’s for branding or marketing goods & services. Forty-four percent are on social media to utilize customer communication for product development and innovation. Fifty-nine percent use social media to communicate with customers for other reasons.
Payment Methods in Canada
- 81% of businesses who made sales online accepted credit cards.
- 55% accepted payments via online payment services (such as PayPal).
- 25% accepted debit cards online.
- Less than 1% accepted crypto currency.
What’s Stopping You?
Seventy-one percent of the Canadian businesses surveyed said they had never sold online.
- 74% said their products aren’t suitable for ecommerce.
- 11% indicated their staff didn’t have the skills, training or experience in online sales.
- 9% thought the set-up costs were too high.
I’m looking forward to seeing the data change over the next couple of years. It will be like watching Canada evolve and grow right before our eyes.
Please share your thoughts in the comments below, or join us in the Online Business Canada Facebook group.
Source: Statistics Canada
Data for the Survey of Digital Technology and Internet Use were collected from November 2019 to March 2020.
The questions on this survey asked respondents to report for reference year 2019 exclusively, so effects of the pandemic are not reflected in the results of this survey.
The target population of the 2019 iteration of this survey included enterprises with Canadian operations and five or more full or part-time employees, with some exceptions. The sample size was 14,127 enterprises and the response rate was 77%.
You may also be interested in reading:
Report: Digitized Canadian Companies More Resilient Through COVID-19
Checklist: How to Start an Online Store (eCommerce Business) in Canada
Canadian Third Party Logistics (3PL) for Online Sales and Ecommerce
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