MARKET - Canada lagging behind in Ecommerce

Recent headlines suggest that Canada is lagging behind other economies in the development of e-commerce transactions.

Earlier this month the Royal Bank published 'Bricks vs Clicks - Why is Canada Lagging Behind in E-Commerce?'

Last spring, The Record published a story entitled 'E-commerce goes north, forcing Canada’s retailers out of hibernation'.

The following table of Stats Can information dated April 2017 shows retail sales up 4.5% over April 2016 and shows that while E-commerce is outperforming bricks and mortar activities, it is still only 2.46% of total retail sales.  

	April 2016r	April 2017p	April 2016 to April 2017p
	thousands of dollars	thousands of dollars	% change
Retail Trade sales (44-453)	46,164,282	48,253,352	4.5
Electronic shopping and mail-order houses sales (45411)	693,493	828,424	19.5
Retail E-commerce 1	851,144	1,205,434	41.6
Retail E-commerce share of total retail trade (%)	1.82	2.46

r - revised

p - preliminary

Source(s):

CANSIM table 080-0033.

The US Department of Commerce, International Trade Administration, supplies information to American exporters. This Report from August 2017, provides a window on their assessment of Canadian E-Commerce. 

Although they acknowledge Canada is one of the heaviest users of the internet,  two quotations from this US report are telling about the state of e-commerce in Canada:

"Although Canadians prefer to support Canadian businesses, a significant proportion of the nation’s e-commerce spending goes to non-Canadian websites. One-third of the total spending is in the United States and the rest in Asia (primarily China) and Europe.  In fact, 67 percent of online purchases Canadians made in 2016 were from other countries."

"As of March 2017, retail e-commerce sales totalled approximately C$1.2 billion. Retailers are investing in digital platforms to reach consumers dispersed over a vast land mass while responding to competition from global e-tailers such as Amazon. In fact, by 2015, 84 percent of Canadians had purchased something online and more than 20 percent of Canadians shopped online about once per month. It is estimated that there will be 20 million digital buyers in Canada who will spend $50 billion annually online by 2019, representing 10 percent of all retail purchases in Canada. Twenty-seven percent of Canadians have shopped online once a month and it is estimated that the e-commerce industry will reach C$50 billion by 2020, representing 10 percent of all retail purchases in Canada."

WHY THIS IS IMPORTANT:
This glimpse of e-commerce suggests there is a great deal of opportunity for e-commerce in Canada. It also suggests that Canadian firms should accelerate their e-commerce strategies and tactics to reduce or eliminate the number of Canadian consumers who cross the border for e-purchases. Perhaps it also shows a degree of risk in this new economy for those who are unwilling or unable to maintain their consumers online with purchases and services. Finally, the numbers show that e-commerce is growing as a category at 4 to 5 times the rate of growth for all retail. Perhaps it would be prudent to curtail new investments in bricks and mortar.