Smaller Firms, Startups Boost Canada's Ecommerce Market - eMarketer

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Smaller Firms, Startups Boost Canada's Ecommerce Market

Ecommerce sales will jump nearly 18% to hit CA$21.61 billion in 2013

December 31, 2013

Consumers in Canada have shown a reluctance to engage in online shopping at the same level as those in similar markets. It’s an odd outcome given their high degree of digital connectedness—78.1% of households in Canada had fixed broadband in 2013. The reality is that slow ecommerce adoption is less about consumer interest in buying online, which is strong, and more to do with the poor online shopping experiences retailers offer, according to a new eMarketer report, “Canada Ecommerce: Startups Pressure Established Players to Innovate.”

But Canada is poised to see significant gains in retail ecommerce sales. eMarketer estimates that sales will jump nearly 18% to hit CA$21.61 billion in 2013 and will experience further double-digit annual growth rates through 2017.

Retail Ecommerce Sales in Canada, 2012-2017 (billions of C$, % of total retail sales and % change)

Driving this strong growth is an inventive breed of ecommerce vendors that has transformed online shopping into more than a digital transaction, enabling product research, price comparison and loyalty rewards. Shopping options were scarce during the first generation of ecommerce development in Canada, but that is changing, with smaller firms and startups providing a creative boost to the market.

Matt Bertulli, CEO of Demac Media, which specializes in ecommerce software, said: “This past year, we’ve seen a big improvement in the small and medium-sized business space in ecommerce in this country. These smaller firms now have better knowledge, investment and ambition.”

What has allowed smaller retail players to be competitive is the availability of software tools enabling easier ecommerce. Ottawa’s Shopify vends such a platform and typifies a powerful trend: affordability and ease of adoption for even the most unsophisticated operators. Solutions from California-based Magento are also being used in Canada.

Off-the-shelf ecommerce solutions have lowered the barrier to ecommerce entry significantly and enabled more nimble competition from retail startups of every stripe. Buoyed by this liberation, new players are demonstrating how best to capture online purchaser attention.

The full report, “Canada Ecommerce: Startups Pressure Established Players to Innovate,” also answers these key questions:

  • How large is the retail ecommerce marketplace in Canada?
  • What is the level of consumer interest in online shopping?
  • What have been the barriers to wider ecommerce development?
  • How have small and medium-sized businesses strengthened Canada’s ecommerce marketplace?

This report is available to eMarketer corporate subscription clients only. eMarketer clients, log in and view the report now.


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