Canadian's Internet Business

Canadian eCommerce May Finally Escape Canada Post ©

eCommerce has been proven time and time again as the future of business, but there has been a huge barrier in Canada that prevented us from competing with other countries. Canada Post has continued to gouge Canadian businesses, refusing to entertain any feasible ideas to make shipping affordable. Their consistent answer to losses is to increase prices, when implementing small business friendly solutions would benefit both the economy and their own bottom line as more businesses choose to ship with them. Ironically, a 2013 Canada Post study found that 68% of Canadian online shoppers cited shipping costs as the number one reason they avoid Canadian retailers.

While Canada Post seemingly lacks interest in creative solutions, FedEx has apparently been thinking about the potential of Canadian eCommerce very carefully. FedEx Express Canada Ltd, recently announced a new opportunity for Home Hardware store owners, allowing them to have FedEx Authorized ShipCenters in their store. As a result, FedEx services will be available at the retail level, much like Canada Post is in stores like Shoppers Drug Mart. This is the most aggressive expansion plan FedEx has attempted in Canada, beginning with 100 Home Hardware stores out of a possible 1100.

The online shopping market in Canada is set to explode over the next few years, with experts predicting online sales will total over $30 billion by 2018. A 2014 study by J. C. Williams found that Canadian online shoppers spend more in almost every category, whether they make the actual purchase online or in-store. The market potential has motivated US companies to expand their eCommerce offerings to Canadians and that is expected to continue to almost universal North American coverage. With our population being spread out and often isolated, online shopping may even surpass levels in the United States. Canada already reigns over the US in both Internet connection and social media usage.

2012 eCommerce and Internet Usage Statistics from Statistics Canada

As the US moves in, Canadian eCommerce is crowded out because we can’t possibly compete with the high cost of shipping here.

As we have suggested to Canada Post, it appears FedEx will offset the cost of serving a highly spread out market by gaining a larger volume of business through more reasonable prices. If they include a few minor conditions, such as mandatory use of online shipping tools in exchange for discounts, they will find this to be a very profitable space.

Canadian eCommerce may now have a fighting chance. Will it make a difference in how you do business? Please share your comments below.

FedEx Express Canada Ltd
Statistics Canada
J.C. Williams
Forrester Research
World Bank

You may also be interested in reading:
Online Canadian Businesses Need Easy, Affordable Shipping Options
Canadian Internet Shoppers Spend More, Both Online & Offline


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