In Search of the Elusive Canadian Online Buyer

When it comes to e-commerce, the US’s neighbor to the north is an enigma.

August 09, 2005 – “eMarketer projects that online buying in Canada will grow more than 20% a year over the next five years, but it is important to note that the growth comes from a low starting point-and is a slight downward revision from our estimates of a year ago,” says Jeffrey Grau, Senior Analyst at eMarketer and author of the Canada E-Commerce report. “If it weren’t for US retailers and Internet companies moving north seeking growth, Canada’s e-commerce projections would be nearly frozen. “

Last year online spending accounted for only 1.1% of total retail spending in Canada. In the US, online sales represented 1.7% and 2.0% of total sales in 2003 and 2004, respectively. Thus online sales contribute close to half as much towards total retail sales in Canada as they do in the US. Still from 2001 to 2004, online sales made inroads into total sales in Canada, rising from a half percent to over one percent.

“In 2005, we estimate that Canadian online buyers will spend an average of $483 online,” says Mr. Grau. “Average spend online is projected to increase annually as Internet users become increasingly seasoned online buyers and consumers have more choice in retailers and products.”

Still, Canadian online buyers spend substantially less, on average, than buyers from either the US or the UK.

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