North America

The Region

North America is a potentially highly profitable but also competitive market. New entrants will need to know their niche and have a strategy for competing with the dominant industry players. In 2018, growth rates were buoyant thanks mainly to tax cuts and export spikes – prompted by rush buying in the face of a potential trade war – In the US. This year, the North American economy is expected to grow more slowly than last. But it’s still forecast to beat growth rates in other mature markets. For merchants that have a niche, and a plan to beat the competition, this region is still one of the world’s most attractive e-commerce markets.

The North American
Payment Landscape

The Local Payment Culture

The most common online payment method in North America is the credit card, with a 57% share of the e-commerce payment market. E-wallets have a 22% market share, bank transfers 8%, cash 5% and various other minor payment methods 8%. The North American card market is dominated by Visa, with a 55% market share. Mastercard has 24% of the card market, American Express 10% and other and local issuers the remaining 11%.

It should be noted that while the most popular payment method in North America is the credit card, the percentage of Mexicans with one is a mere 9.5%. And while it is the most popular payment method in Mexico at 40%, the other payment methods have a far higher share of the market than in the other two countries.

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The E-Commerce Market

The North American e-commerce market is worth more than $808 billion and is growing at a rate of 13% a year. The average North American e-shopper spends more than $3,200 a year online and e-commerce sales already account for more than 13% of all retail sales. In the US, the most popular purchase categories are travel (22%), clothing (12%) and electrical goods (10%). In Canada the categories are travel (18%), electrical goods (14%) and clothing (11%). While in Mexico they are travel (14%), clothing (12%) and electrical goods (8%).

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Amazon dominates the North American market, with 49.1% of e-commerce sales. The rapid rise of e-commerce has had devastating consequences for the previously beloved American mall in what commentators have dubbed the ‘retail apocalypse’. According to the Wall Street Journal, US retailers closed an estimated 8,600 outlets in 2017. That’s more than closed in 2008 at the height of the recession. Another 5,000 closed in 2018.

Not everyone has failed to keep up with the times, though. Between 2016 and 2017, Walmart’s e-commerce sales increased by 44% to $11.5 billion. But that still gives them only a 3.7% share of the US e-commerce market, compared to Amazon’s 44%. This shift to online commerce is both a blessing and challenge for newcomers to the North American market. On the one hand, it implies consumers are comfortable shopping online and want to do more of it. On the other hand, the growth in e-commerce is driven by giant and formidable competitors. New entrants will need a watertight business model and a clear understanding of their niche and their audience.

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PPRO Country Insight Canada

Report / 20.08.2019

Canada is the second-largest country in the world. It’s also one of the world’s most sparsely populated nations, with a population density of four inhabitants per square kilometre. The EU, by comparison, has a population density of 121 inhabitants per square kilometre.

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