Summary: Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and, reputable, prominent B2B websites.
Last Published: 9/30/2019
As one of the world’s heaviest users of the Internet, Canadians have embraced electronic commerce amid a major disruption in retail channels. In fact, in 2018 there was 19.8 million eCommerce users in Canada and there is expected to be an additional 5.21 million users shopping online by 2021. Increased online shoppers means that retail e-commerce sales in Canada continues to climb, both in real terms and as a proportion of total retail. According to Statistics Canada, in the first two months of 2019, retail eCommerce sales accounted for US $2.2 million. It is estimated that retail e-commerce sales will total US $47.9 million by 2020. Retailers are investing in digital platforms to reach consumers dispersed over a vast land mass while responding to competition from global e-tailors such as Amazon Canada. Fashion is currently the leading product category, followed by Electronics and Media. Fifty-nine percent of Canadian shoppers use credit card when shopping online and a further 20 percent prefer PayPal.

Statistics
Capital:                        Ottawa, Ontario
Population:                 37.06 million (2019)
Currency:                    Canadian dollar (CAD)
Language(s):               English, French
Internet penetration: 96.3 percent or 35.7 million people (2019)
National domain:       .ca


Contact
Tracey Ford, Commercial Specialist
U.S. & Foreign Commercial Service Ottawa
Tracey.Ford@trade.gov
Tel: (613) 688-5406


Current Market Trends
Canadian consumers increasingly rely upon the Internet to place orders. For the past decade, Internet consumer sales have risen at a far higher rate than traditional retail sales. Most Canadian retail firms have adopted wireless technologies and internet-based systems to improve business-to-business and business-to-consumer relations. Manufacturing firms and government organizations are also increasingly likely to use the Internet for purchases, especially for small routine orders.

The Canadian e-commerce market closely resembles that of the United States and therefore shares some of the trends in the retailers to the south. Trends shaping the Canadian e‑commerce market include:

Hybrid purchases/ "Click and Collect" – so-called "omnichannel" consumers order goods online and pick them up in a brick and mortar store.

Marketing through social media – return on investment for using social media is constantly improving; retailers increasingly spend marketing dollars on social media ads.

Cybersecurity – fraud is a growing concern for Canadian retailers. Tools that help companies detect and deter cybercriminals are becoming more easily available and affordable, with integration often built into a company’s strategic planning.

Migration to mobile payments "mPOS (mobile Point-Of-Sale)" – continues to increase in Canada using technologies like Apple Pay, Android Pay, and Google Pay.

Although approximately 88.5 percent of all Canadians have access to stable internet service, the users primarily live in the more urban areas of the country. Internet access provides a crucial link to the rest of the world for residents in remote communities in Canada’s north, but delivering high-speed services remains costly and difficult.

Domestic e-Commerce (B2C)
The growth of e-commerce is due not only to the volume of purchases, but also to the breadth of goods and services Canadians purchase. The products that Canadians are buying from U.S. based merchants are apparel and accessories, followed by books, music and videos; consumer electronics; toys, hobbies, and games; health and beauty products; footwear; jewelry; household goods; sporting goods, DIY and garden supplies and groceries.

Cross-Border E-Commerce
Although Canadians prefer to support Canadian online business, a sizable proportion of the nation’s e-commerce spending goes to non-Canadian websites. A 2017 report from eTail Canada says that close to half of Canadian consumers’ online purchases are made at foreign retail sites. Canada has many small and medium-sized enterprises (SMEs), but the companies have been slow to enter the e‑commerce industry. Canadians cite lower prices and better selection as some reasons for shopping outside the country.

Due to Canada’s strong economy and proximity to the United States, retailers aspire to tap into the growing e-commerce market in Canada. For U.S. retailers who are selling beyond their borders for the first time, Canada offers an easy cross-border opportunity with similar taxes, fees, and shipping safety. How-to websites, such as CrossBorderShopping.ca, have also been created for the sole purpose of aiding Canadian consumers through the process, providing price comparison tools and outlining areas such as return policies, taxes, and restrictions.

B2B e-Commerce
Virtually all Canadian small business owners report making online purchases. Large numbers of business owners are opting to purchase their travel online and are more likely to access government services or office supplies online.

E-commerce Services
Canada's e-commerce infrastructure is highly developed and closely integrated with that of the United States. Broadband internet access is offered throughout Canada using much of the same equipment as in the United States. Information flows freely across the border, and without difficulty. U.S. companies do not need to set up a separate website. Many U.S. companies have integrated Canadian transactions into their current websites. Others maintain a distinct ".ca" domain. U.S. companies selling to Canadian business and consumers over the Internet should have procedures in place to meet Canadian customs requirements and pricing in Canadian dollars. More than 200 languages are spoken in Canada. English and French are official languages. This linguistic duality can present an obstacle for retailers, sometimes requiring multilingual customer care and sites to be successful.

U.S. companies need to comply with Canada's federal data privacy laws, including the Privacy Act and the Personal Information Protection and Electronic Documents Act (PIPEDA), as well as provincial privacy laws. A main requirement of PIPEDA requires persons or firms that collect personal information during commercial activities to inform the subject of all possible uses of the data and to obtain consent for the use.

Canada’s Anti-Spam Law (CASL) took effect on July 1, 2014 and was scheduled to come into full effect July 1, 2017, however a cabinet order dated June 2, 2017, indefinitely repeals that July coming-into-force date so Parliament can examine the legislation.

CASL significantly limits the way companies send Commercial Electronic Messages (CEM). A CEM is defined as any electronic message intended to encourage participation in a commercial activity. An electronic message includes email, text messages, VoIP phones, digital radio, digital TV, and some aspects of social media. Under CASL, the sender of a CEM must have express or implied permission before sending the recipient a CEM. Although CASL does not ban sending CEMs, the law requires that senders obtain prior consent before sending the CEM. Senders must also provide identifying information in all CEMs. This information must be valid for 60 days after the message is sent. All CEMs must also include an obvious unsubscribe mechanism.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Canada eCommerce Industry Trade Development and Promotion eCommerce