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E-Commerce in Canada

E-Commerce in Canada

Internet and Canada. The market becomes virtual, the paradigm transformation of purchasing behavior resembles a revolution supported by the growth of electronic commerce

 

The article by the lawyer Francesco Granata, Senior Associate Nctm Law Firm, is taken from the series of lectures held as part of the LUISS International Trade and Food Law Summer School. The EU and its leading trade partners - Trade - Contracts - Business, edited by CSIC with Nctm Law Firm.

 

If until a decade ago thinking of buying and selling online could only be imagined or watched in one of the best futuristic movies, this phenomenon has now become part of global everyday life.

 

Aided by innovation and globalization, obsolescence has become increasingly rapid and the need has arisen for companies to maximize the use and exploitation of all the potential of technology.

 

Here, e-commerce has found, in this context, fertile ground to take root, creating a totally new channel that is based on the application of technological information and on the questions of economic development and that drives global and sustainable growth.

 

Globally, the e-commerce market is in a state of continuous development and, according to future prospects, global retail sales via e-commerce are expected to grow from US $ 3.53 trillion in 2019 to beyond. 6.54 trillion in 2023[1].

 

The purchasing revolution is driven, thanks to an efficient logistics network, by the flexibility with which users can purchase products without having to physically go to the traditional real shops.

 

Prices always play an important role on the market, a rule that also applies to e-commerce: increasingly interesting for final buyers with the plus of using electronic and instant payment services and, last but not least, the use of express couriers.

 

Global Comparison Revenue in Million US$

 

E-commerce in Canada


Canadians have readily embraced the Internet as a tool for exchanging and disseminating information and conducting business transactions. Canada, in particular, has become a particularly lucrative market thanks to its considerable digital population. Therefore new laws have been introduced focusing on e-commerce issues[2].

As evidence of the growing use of the network for shopping, it should be noted that already at the end of 2019, retail sales through e-commerce channels in Canada amounted to almost CAD 1.85 billion, with approximately 28.1 million. of Canadians who had shopped online.

Retail e-commerce revenue in Canada from 2017 to 2024

 

According to recent statistics, the revenues that will be generated in the retail e-commerce market will exceed US $ 33 billion by 2024, compared to 25.4 billion in 2019.

 

Despite the positive trends, Canadian companies were initially relatively slow to switch to e-commerce and invest in an online presence.

 

 

Major US players took advantage of this initial gap, leaving their mark on the Canadian e-commerce landscape.

 

In 2018, Amazon was the most popular online platform in Canada, with an estimated e-commerce revenue of US $ 3.5 billion. That year, the online retail giant took the top spot in various product segments, including food and personal care, electronics and media.

 

Most popular online stores in Canada in 2018, by e-commerce net sales

 

According to surveys conducted by the Canada Post[3], Canadians are feeling more and more comfortable and confident about shopping online.

 

Between 2016 and 2018, the average number of online purchases made by Canadians each year increased by 58%. Computers and electronics, women's clothing and books dominate the top three market segments, but the other sectors are, however, constantly expanding.

 

E-commerce sales by category In Canada 2017-2023 (expected)

 

Strong key sectors are, for example, footwear, collectibles, perishable and non-perishable foodstuffs, cars, items for pets, and furniture.

From the analysis of the behavior adopted by online buyers, it emerged that Canadians prefer to give up the purchase when sufficient information or checks are not provided at the time of payment and, above all, that they are very attentive to the delivery instructions.

Almost 40% of shoppers said they avoid purchases involving retailers and couriers who don't offer sufficient and satisfying tracking service.

 

Shipment tracking is one of the most sensitive factors for shoppers who are dissatisfied when a package is difficult to track or when tracking information is missing.

 

According to data collected in a 2018[4] survey, Canadian shoppers prefer online shopping to in-person purchases for the best selection of products, the time and money savings that virtual browsing between offers allows.

In terms of spending, Canadians mostly bought high-end products from domestic retail sites, while they turned to US-based suppliers for lower value orders.

 

About 17% of Internet shoppers have spent more than CAD 2,000 on online goods and services, while 25% of digital shoppers have annual average digital spend less than $ 500.

 

As for online payment, the Canadian e-commerce market has interesting features.

 

Credit card has been the preferred payment method for online shopping for several years, despite various technological advances in the field of online payment services and the proliferation of payment service providers.

This trend is indicative of how the attitude of some Canadians takes some time to adapt to embrace certain services.

 

However, in 2019, 43.2% of Canadian smartphone owners said they used a mobile banking application, while another 20.4% conducted financial transactions via the PayPal application.

 

In conclusion, Canadians are showing a growing interest in the world of e-commerce, they become more receptive over time to ever more new and innovative tools and, although progress in the Canadian e-commerce sector has been rather slow, the market forecasts suggest that the sector is set to develop significantly in the coming years.

*Senior Associate Nctm Studio Legale


[1]  This growth hypothesis was advanced by studies carried out by Statista (https://www.statista.com). About to read the article by J. Clement, March 23, 2020, at the following link https://www.statista.com/topics/2728/e-commerce-in-canada/ .

[2] The ability to regulate Internet activities is shared by both federal and provincial legislators. Internet regulation itself is a federal responsibility, but the Canadian Radio, Television and Telecommunications Commission (CRTC), the relevant federal agency, announced in 1999 that it did not intend to regulate Internet content. However, Internet activities are governed by federal and provincial legislation as well as various common law principles. Federal and provincial legislation relating to electronic transactions and electronic commerce is in principle consistent in the treatment of the applicability and formation of contracts online. Legislation governing electronic transactions and electronic commerce has been enacted in most of Canada's provinces and territories, and with the exception of Quebec, provincial e-commerce legislation is largely modeled on the Uniform Electronic Commerce Act adopted by the Uniform Law Conference of Canada. This legal text was designed to provide provinces with coherent legislation that implemented the principles of the United Nations Model Law on Electronic Commerce, adopted by the United Nations General Assembly in November 1996.

[3] For further information, read the complete survey, which can be downloaded at the following link: https://www.canadapost.ca/assets/pdf/2019_ecomm_benchmark_report-en.pdf. It is also possible to consult the following studies carried out by the same Canada Post: (i) 2016 Canadian Online Shopper Study, CPC 18-200, April 2016 e (ii) 2018 Canadian Online Shopper Study, CPC 18-200, April 2018.

[4] See the market surveys carried out by https://www.statista.com/topics/2728/e-commerce-in-canada/ .