Canada is a lucrative and high-spending e-commerce market. Localisation is crucial to success, particularly in the French-speaking areas. Merchants entering the market should also factor in increased carrier costs when serving remoter and rural communities.
Canada’s economy is forecast to grow by 3.9% in 2022 and 2.85 in 2023 . The average Canadian earns US$43,450 a year, 27% more than the average EU citizen . By the second quarter of 2022, unemployment was 5.3% , high by current standards in the developed world but low by recent Canadian standards.
In the first quarter of 2022, the volume of Canadian retail sales rose by 8.5% in comparison to the same time last year . This trend may not hold in the face of an uncertain international and economic situation.
Canada’s e-commerce market
Canadians are less likely than their American neighbours to shop online. Only 8% of Canadian retail sales are made online, compared to 15% in the US . The most popular online purchase categories are travel (27%), electrical goods (20%) and beauty products (18%) .
The total Canadian e-commerce market is worth $80 billion and is growing at a rate of 17% a year . As well as being less likely to shop online than Americans, Canadians are also less likely to shop using a mobile device. Just 36% of online purchases were completed on a tablet or smartphone .
Around 30% of Canadians now do their grocery shopping online, double the figure from before lockdown . Talking to eMarketer, Toronto-based retail analyst Marina Strauss predicted that the pandemic will permanently alter Canadian’s shopping habits: bad news for brick-and-mortar stores but good news for e-commerce merchants .
Payment methods in Canada
The Canadian market for payment methods is dominated, though not overwhelmingly, by cards. Canadians are even more fond of credit cards than Americans. 66% of all online purchases are paid for by card . But that doesn’t mean that payment alternatives aren’t significant in Canada. Canadians pay for 23% of online purchase using an e-wallets, 7% by bank transfer, 1% with cash, and 3% by various other payment means . Looking specifically at the card market: Visa has a 40% market share, local schemes 32%, Mastercard 25%, and American Express 1% .
Enabling and limiting factors in Canadian e-commerce
One hundred percent of Canadians now have a bank account . High rates of inclusion hold broadly true across the social spectrum, with 99.8% bank-account penetration even among the poorest 40% of the population . Where financial exclusion does exist, it mainly impacts very low-income Canadians, including poorer ethnic-minority and First Nations communities. The organisation Prosper Canada reports that only 20% of Canadians with an income of less than $20,000 have opened a tax-free savings account .
94% of Canadians have a fixed-line broadband connection . Rates in rural areas are much lower, with 27% of rural households having access to the Internet via wireless services, but not fibre, cable, or DSL . But as over 80% of the population lives in urban areas, the absolute number of rural households without a fixed connection is still small . And the Canadian government has pledged to increase broadband speed to 10Mbps for wireless services and unlimited for broadband .
Canada ranks 20th out of 160 countries in the World Bank’s Global Logistical Performance Index . Parcel numbers handled by Canada Post increased by 22% in 2020, the result of a lockdown-fuelled increased in e-commerce volumes .
- Original PPRO research.
- Investor Brief: Promoting Financial Inclusion in Canada’s Financial Services Sector, October 2013, Shannon Rohan, SHARE.