Canadian e-commerce on the rise

Recent research indicates that Canadian e-commerce spending is on the rise — especially in the area of travel — and that more and more Canadians are looking to spend their online dollars domestically.

Marketing research firm comScore Media Metrix Canada Inc. uses a panel of approximately 20,000 Canadian households on an ongoing basis. These people have given the firm permission to capture their online activities, thereby allowing comScore to collect information about their Internet usage, explained the company’s president, Brent Lowe-Bernie. Through this panel, comScore found that Canadian e-commerce shoppers have increased their spending by 20 per cent this year at more than 200 of the largest e-commerce sites around the world.

This increase may spell good news for Canadian companies with an e-commerce presence. The results from the panel also found spending on Canadian Web sites was actually higher than the amount spent on non-Canadian Web sites. In the fourth quarter of 2002, 46 per cent of Canadian resident Internet users made purchases at non-Canadian Web sites, while 54 per cent spent their money on Canadian sites.

In the fourth quarter of 2003, those numbers shifted as 37 per cent of Canadians made purchases at non-Canadian sites, while 63 per cent shopped online domestically, the company found.

“Versus two years ago, there’s more [online] Canadian content available,” explained Lowe-Bernie. He added that over the last few years there has been a fair amount of progress in the area of studying how people use Web sites, how to improve ease of use and how online processes can be made easier. This, in turn, has enabled e-commerce sites to grow and find the technology that is required to meet visitors’ needs.

As well, as more Canadians become familiar with the Internet as a medium, there will be more people looking to use it for services and goods.

“I think that what we find, quite frankly, is that e-commerce develops as people’s time online grows. So when they move from being ‘newbies’ to being experienced online users, they go through a pattern of e-commerce: they don’t do it at all; then they maybe buy a few books and CDs; and then they graduate from there. There’s a growth curve,” Lowe-Bernie explained.

Demographic analysis by the company indicates online spending by users between the ages of 18 and 34 has increased by more than 44 per cent compared to levels a year ago.

ComScore said the overall increase in e-commerce spending was due largely in part to the travel industry. Online travel spending has grown by more than 50 per cent, accounting for 46 per cent of Canada’s total consumer e-commerce sales in the fourth quarter of 2003, the firm said. These figures exclude any online spending on auctions.

Looking ahead, Lowe-Bernie said spending will likely pick up in categories such as retail. However, spending on travel “will start to slow down, because you can’t keep doing 50 per cent [growth],” he said.

“I think that business has pretty much been revolutionized by online,” he added.

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