Why Canada has a serious e-commerce problem, in one infographic

Consumer-retailer disconnect is driving money abroad

(Atomic Imagery/Getty)

(Atomic Imagery/Getty)

Cyber Monday sales will top $2 billion this year, according to IBISWorld, but Canadian company are likely to take home a tiny slice of the Thanksgiving e-commerce pie. Most of the country’s retailers aren’t doing enough to attract consumers’ online shopping.

“We’re not bad, we’re terrible!” says Retail Prophet founder Doug Stephens. “Amazon is selling four times what their competition combined in Canada does online. That in itself is enough motivation to get Canadian retailers to recognize that they’re asleep at the wheel and they need to get into this game.”

COMMENT: Dear Canadian businesses: time to get it together on Internet commerce »

Canada has become an unlikely hub for the development of e-commerce platforms, with market leader Shopify, big-brand focused Elastic Path and small storefront ShopLocket all coming out of this country’s tech sector. Unlikely, because e-commerce makes up only 3% of total retail economy spending in Canada.

Elastic Path CEO Harry Chemko says the paucity of online shopping options may be driving Canadians to build new platforms that facilitate it. “Part of me thinks that its because Canadian entrepreneurs get frustrated because our e-commerce experiences aren’t as good as they are south of the border,” he says.

MORE: Vancouver’s Elastic Path raises $3.5 million to invest in e-commerce’s wearable future »

Chemko points to a troubling phenomenon for Canadian retailers: some two-thirds of Canadian consumers who shop online make their purchases from U.S. websites. That’s a lot of money leaving the country because it has nowhere to go within it.

There are Canadian e-commerce success stories. Innovative entrepreneurs like ClearlyContacts founder Roger Hardy are re-entering the field with new ventures, new ideas like Vatché Pirjanian’s Pochetti are seeing significant pickup, and Frank and Oak remains one of the country’s most exciting brands. But those few examples aren’t enough to adequately service a population hungry for the convenience and value of online shopping.

MORE: ClearlyContacts.ca founder Roger Hardy places his next big bet on online shoe-shopping »

Here’s the scope of Canada’s e-commerce problem, in one infographic:

Source: Canadian Internet Registration Authority/comScore; Internet Association; Accenture; Google Canada; McKinsey

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7 comments on “Why Canada has a serious e-commerce problem, in one infographic

  1. You forgot a huge barrier on this one: high cost of shipping. Even Canada Post’s own 2013 survey indicated that high shipping costs are the number one reason consumers avoid online shopping in Canada. It’s so high that the average company can’t offer free shipping and low flat rate deals.

    If Canada Post would fulfill its mandate to provide affordable shipping options to Canadians, it would go a long way towards leveling the playing field. As it stands, they won’t even offer flat rate shipping boxes. In fact, all they do is RAISE prices. Compare how CP treats businesses to how USPS treats businesses and the differences are undeniable. Why? Because USPS recognizes that supporting business shipping brings them more than enough volume to be profitable. If CP won’t do it on their own, the Gov’t needs to step in in the name of economic growth.

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