e-Commerce is the buying and selling of goods online, including the digital transmission of payment and data. Similar to traditional commerce, the three main types of e-Commerce are business-to-business, business-to-consumer, and consumer-to-consumer.
e-Commerce has skyrocketed in popularity over the past decade and due to the pandemic, online sales are reaching an all-time high. The creation of new banking apps and mobile payment services, such as Apple Pay, Google Play, and PayPal, have made online shopping easier than ever. In fact, retail e-commerce sales are expected to reach up to $108 billion in sales by 2023.
Learn more about Canada’s e-Commerce specifics down below.
e-Commerce Statistics for Canadians
- e-Commerce experienced a 75% increase in 2020.
- In December 2020, e-Commerce retail trade sales amounted to US$3.82 billion.
- By 2025, e-Wallets are expected to make up 27% of all online payments.
- 34% of retail e-Commerce is done on mobile devices.
- Canada is the ninth largest market for e-Commerce.
- 16.6 is the average number of online purchases made by Canadians per year.
- 55% of e-merchants sell through social media.
Canadian e-commerce retail sales reached an all-time high in December 2020
In December 2020, Canadian e-Commerce retail trade sales reached US$3.82 billion, surpassing the previous May 2020 record of US$3.2 billion. Lockdown measures, due to the COVID-19 pandemic, have made online shopping even more convenient, allowing consumers to purchase anything they need from the comfort of their homes. As of 2019, e-Commerce accounted for 6.9% of all retail sales in Canada. Insider Intelligence predicts that by 2025, e-Commerce will be responsible for 13.4% of all Canadian retail sales.
There are over 27 million Canadian e-Commerce users
Over 27 million Canadians are e-Commerce users, translating to 72.5% of the population. The number is expected to increase to 77.6% by 2025. As of 2020, 37% of Canada’s online shoppers were Baby Boomers, ages 53 to 72. The second and third most common shopper demographics were Gen X-ers (ages 38-52) and Millennials (ages 24-37), respectively.
Fashion is the most popular e-Commerce product
Fashion is the most popular e-Commerce product in Canada, followed by electronics and media. The most popular online clothing stores in ranked order are Gap Canada, Hudson’s Bay Company, Amazon Canada, Zara, and Walmart. By 2025, Statista predicts fashion e-Commerce will show an annual growth rate of 15.45%, with the average revenue per user (ARPU) reaching up to US$851.91.
The largest e-Commerce market in Canada is Amazon.ca
Amazon’s subsidiary, Amazon Canada, is the largest e-Commerce market in Canada, with its 2020 net sales reaching US$ 7,136 million. The website receives about 32.08 million unique visits per month, over 60% of which come through direct website searches. At the end of the fourth quarter in 2020, the Amazon reported a sales revenue of US$125.6 billion. In 2018, Amazon Canada reported Canadian small and medium-sized business collectively accumulated over $900 million in sales.
The following two most profitable stores, Walmart Canada and Costco Canada, earned $2.3 billion and $1.6 billion, respectively, in revenue.
In 2021, Over 30% of retail e-Commerce takes place on mobile devices
In Canada, about 34% of retail e-Commerce occurs via mobile devices. Statista estimated that in 2020, mobile device e-Commerce purchases accounted for US$20 billion in revenue, whereas desktop e-Commerce reached up to US$57 billion in revenue. The practice of conducting e-Commerce through mobile devices is known as m-Commerce.
The US International Trade Commission reports over 50% of Canadian have made m-commerce purchases, as of January 2021. Millennials are the most popular consumer demographic for m-commerce. M-commerce is expected to rise in the next few years, due to the development of new convenient mobile shopping and payment applications.
Twenty percent of Canadian online shoppers use PayPal
Almost 60% of Canadians use traditional credits cards for their payment method of choice in e-Commerce transactions. About 20% of Canadian e-Commerce users pay via PayPal, an online payment system provider. Other popular electronic payment methods (or eWallets) in Canada include Apple Pay Canada, Google Play Canada, Samsung Pay Canada, and Alipay. eWallet usage is expected to increase, as the US International Trade Commission expects 27% of online payments, by 2025, to take place via eWallets.
Mobile payment has become more popular in recent years due to its fast and convenient nature, especially for online shopping. As many consumers choose to have their computer remember their login credentials, the check-out process can occur in a matter of seconds.
Older users feel more uncomfortable making online purchases compared to younger demographics
With the ease brought forth by eWallets, comes suspicion as well. Older demographics are more comfortable using traditional methods of payments due to security concerns. However, eWallet services have been shown to be just as safe as regular credit card methods. These systems use tokenization, a data security mechanism that temporarily substitutes important data with an undecipherable string of details. Only once the payment is accepted by a secure financial services provider are the values uncovered.
eWallets are most common amidst younger generations, with about 57% of the Canadian population, ages 18-34 storing personal financial information in a mobile app or e-Commerce site. The number is similar to Canadians ages 35-44, where 51% store their data in m-Commerce apps.
Sixty percent of online purchases are made by 18% of online shoppers
An average of 16.6 online purchases was made by Canadians in 2019. About 8% of Canadian online shoppers were in the hyper elite category, purchasing over 41 items online in one year and 10% were in the hyper category, purchasing 25-40 items. About 6% of Canadian online shoppers only shopped online once.
Over half of all online purchases are made by shoppers in the hyper and hyper elite categories. One reason for this is the influx of subscription-based services reduces shipping costs and time, making online shopping more convenient than in-store browsing. For a monthly payment, marketplaces, such as Amazon Prime Canada, allow consumers to fall into the pattern of visiting the website multiple times a week to purchase everything from essentials to luxury items.
About 95% of e-merchants who sell through social media do so through Facebook
Social media ads are powerful advertisement tools that can lure consumers into purchasing items they didn’t even realize existed. About 46% of Canadian online shoppers visited a retail website after they received a social media ad from it. Around 55% of e-merchants now sell their merchandise through social media, with an overwhelming majority coming through Facebook.
Ninety-five percent of these merchants sell through Facebook, with 69% selling through Instagram and 14% selling through Twitter. Companies will utilize their demographic breakdowns to best assess which social media app will reach their target clientele.
The most common reasons for using e-Commerce include cost savings, convenience, in-stock availability, and eliminated waiting times. e-Commerce popularity has already become a massive revenue source for Canada, with an expected increase to occur by 2025. Amazon Canada continues to lead as Canada’s greatest marketplace retailer, as the corporation continuously grows as a global player, offering competitive, low prices for an extensive variety of products.
In order to keep with consumer needs, more small and medium-size businesses are expanding their online presence, through digital inventories and online payment transaction options.
Frequently Asked Questions
e-Commerce experienced a 75% increase in 2020.
Canada is the ninth largest market for e-Commerce in the world.
16.6 is the average number of online purchases made by Canadians per year.
34% of retail e-Commerce is done on mobile devices.
55% of e-merchants sell through social media.