Canada: Opportunity for U.S., U.K. Ecommerce Merchants?

Canada is the top choice of 84 percent of U.S. merchants who market cross-border, based on the 2014 Multichannel Merchant Outlook report. Obvious advantages are a frequent language (most of those 10 million French speaking Canadians are bi-lingual), uncomplicated delivery, and higher credit card penetration.

Benefits to Selling in Canada

Sixty percent of Canadians make purchases from American net merchants and Canadians comprise 37 percent of international cross-border shoppers, says cross-border transaction processor Payvision. Furthermore, tax regulations and laws are harmonized in most states.

Why are the overwhelming majority of Canadian online purchases from merchants outside the nation? Canada simply does not provide plenty of domestic choices for internet shopping. Remarkably, the nation that’s home to Shopify, among the most popular ecommerce platform suppliers, is a laggard when it comes to the Internet and ecommerce. Just 46 percent of Canadian companies have a site based on The Internet Association and ecommerce websites are even more infrequent.

Why are the overwhelming majority of Canadian online purchases from merchants outside the nation? Canada simply does not provide plenty of domestic choices for internet shopping.

Based on Cameron Schmidt, PayPal Canada’s General Manager, just 20 percent of Canadian companies engage in online selling. Additionally, products coming from the U.S. tend to be priced lower than domestic goods. About two-thirds of Canadian consumers who shop online make their purchases from U.S. or UK sites.

Canadian Consumers Embrace Online Buying

Conversely, consumers in Canada are avid Internet users. They see the most web pages of any developed nation, according to online research firm comScore, and 93 percent of Canadians explore products online before purchasing. Over half use the internet to buy goods or services. Online research company eMarketer reports that Canadians bought $22.97 billion worth of products online in 2014. The average order is over $100.

Amazon’s Canadian site, Amazon.ca, is the largest player in ecommerce. It controls about 7% of the Canadian online retail marketplace while Costco.ca and Walmart.ca, have 1.6 percent and 1.5 percent of the industry respectively, according to BMO Capital Markets.

In 2013, Amazon.ca introduced 14 new merchandise categories, including packed groceries, cosmetics and office supplies. It supplies a French version in addition to an English version. French-speaking Canadians are thought of as the very price conscious.

While Amazon.ca currently offers 58 million things, the amount is well below the 266 million offerings on Amazon.com. Therefore, many Canadians store on the U.S. Amazon website. Together, the two sites have a 29 percent share of online sales in the nation, according to research company Euromonitor.

Third-party merchants can sell on Amazon.ca, as with Amazon.com, and the company provides a currency converter tool. Shop.ca, a tiny domestic competitor to Amazon.ca, also accommodates sales by third party merchants.

Amazon.ca provides 58 million things, well under the 266 million offerings on Amazon.com.

PayPal’s Schmidt suggests that one-fifth of Canadians have PayPal accounts and Apple Pay is now also available in the nation.

What Do Canadian Consumers Expect of Online Merchants?

Canadians like discounts and promotions. Misko Kancko, director of international strategy for Canada Post, claims that 60 percent of shopping cart abandonment is due to absence of both of these offers. They also need a clear returns policy and easy returns. Failure to deliver a return policy accounts for 34 percent of shopping cart abandonment.

Businesses can purchase software to make Canada Post return labels which can be emailed to clients directly. It streamlines the process of returns so clients can simply attach the tag to their package and drop it off at their local post office.

On May 31, 2015, the U.S. Postal Service switched to zone-based pricing for Priority Mail International shipments to Canada. Shipping rates are now determined by the U.S. source ZIP code and Canadian destination postal code, as opposed to a flat rate. This is like the way the U.S. Postal Service ships packages domestically. Shipping from big cities with international service centres will be less costly, but costs from smaller towns will increase.

Mobile Shopping in Canada

Canadians are avid mobile users. Eighty-one percentage of them subscribe to a wireless provider, and 52 percent of those subscribers use tablets and smartphones. comScore estimates that 49 percent of the time Canadians spend online is on a mobile device. Thus, it’s important to provide a excellent mobile buying experience.

Bottom Line

Canadian customers have shown their willingness to purchase online and for any reason, Canadian merchants are slow to embrace ecommerce. Canada represents a fantastic chance for online merchants in the U.S., the U.K., along with other nations, either selling directly or using a marketplace like Amazon.ca.


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