E-commerce: Shopping on the Internet 2005

November 1, 2006 – Canadians ordered just over $7.9 billion worth of goods and services over the Internet for personal or household consumption in 2005, according to data from the new Canadian Internet Use Survey. They placed almost 50 million orders on-line during that year.

E-commerce, that is the value of orders made on-line, still represented a very small fraction of the $762 billion in personal expenditures on goods and services that consumers made last year. However, the new survey confirmed the popularity of on-line shopping from both domestic and foreign vendors.

Almost 7 million Canadians aged 18 and over placed an order on-line in 2005 while slightly over 9 million logged on to browse, or in other words, to do some “window shopping”. The people who made an on-line purchase represented about 41% of all adults who used the Internet in 2005.

Travel services such as hotel reservations and car rentals were the most common type of order, followed closely by books, magazines and digital products.

About three quarters of adult Canadians who made an order on-line in 2005 reported paying directly over the Internet with a credit or debit card for some or all of their purchases. Even so, survey results show a vast majority of Internet shoppers remain concerned about Internet privacy and credit card use.

Note to readers

The 2005 Canadian Internet Use Survey (CIUS), conducted as a supplement to the Labour Force Survey in November 2005, asked more than 30,000 Canadians aged 18 years and over about their Internet use, including electronic shopping, for the previous 12 months. It excluded residents of the territories, inmates of institutions, persons living on Indian reserves, and full-time members of the Canadian Armed Forces.

This release features information on electronic shopping including the number and value of orders Canadians made on-line. Information on Internet use (the proportion of Canadians using the Internet and the reasons for their use) was released in The Daily on August 15, 2006.

The new survey replaces the Household Internet Use Survey (HIUS) which focused on households. In 2003, Canadian households made an estimated 21 million orders on-line with a total value of $3 billion. CIUS now conforms more closely to international standards by measuring individual Internet use, but should not be compared directly with HIUS. It is possible that some CIUS respondents may report on-line expenditures made by other household members, particularly for items that are jointly consumed such as travel.

Definitions

An Internet user is someone who accessed the Internet from any location for personal non-business reasons.

An Internet shopper is someone who used the Internet from any location to browse (i.e. window shopping without making an order on-line) or to order goods or services for personal or household use.

E-commerce refers specifically to an order made over the Internet regardless of the method of payment.

Albertans and British Columbians heaviest users of e-commerce

Use of the Internet for e-commerce varied widely according to a number of factors, including where one lived, level of income and age.

Albertans and British Columbians were by far the heaviest users of e-commerce, with 45% of adult Internet users in these two provinces placing an order for goods and services on-line in 2005. The proportion was lowest in Quebec, where about 35% of Internet users did so.

Over one half (52%) of adult Internet users living in households with incomes of $70,000 or more reported an on-line purchase last year, compared to 32% among Internet users in households with incomes less than $70,000.

Younger Internet users were more likely to buy on-line than their older counterparts. About 44% of users under 45 made an electronic order in 2005, compared with 36% among those aged 45 or older.

While the proportion of men and women using the Internet in 2005 was the same, there were clear differences in Internet shopping. About 45% of adult males who used the Internet placed an electronic order, compared with 38% of women, and men were also more likely to browse.

In addition, 43% of Internet users living in urban areas placed an order on-line, compared with 34% in rural and small town areas.

Canadian vendors had slight edge in on-line orders

About 57% of the 49.4 million electronic orders for goods and services in 2005, some 28.3 million, were placed with a Canadian vendor, survey results showed. These orders represented 63%, or just under $5 billion, of the total value of orders. This means that for every $100 spent by Canadian adults on-line during 2005, $63 were spent with Canadian vendors.

On average, each adult consumer placed 7.2 orders on-line in 2005, with an average value of $160. In terms of Canadian vendors alone, consumers placed an average of 5.2 orders on-line, with an average value of $176 per order.

Travel and reading material most common on-line purchase

The most common types of electronic orders during 2005 were travel arrangements, books and magazines, other entertainment products such as concert tickets, and clothing, jewelry and accessories. Music, computer software and digital video disks were also popular orders.

More common electronic orders from Canadian vendors included books, magazines and on-line newspapers, or other entertainment products such as concert tickets and travel arrangements.

There were notable differences in orders when the personal characteristics of the purchaser were taken into consideration. For example, of male adults who placed on-line orders, 26% reported purchasing computer software, compared with only 14% of women.

In contrast, women were more likely to order books, magazines and newspapers on-line, as well as clothing, jewelry and accessories.

Shoppers under the age of 45 were about twice as likely to order music on the Internet as those 45 years and over, as well as being more likely to order concert tickets. However, shoppers in the older age group used Internet in greater proportion to make travel arrangements.

Three quarters of adult Canadians who made an order on-line in 2005 reported paying directly over the Internet with a credit or debit card for some or all of their purchases, while about 17% reported paying with a credit card over the telephone.

Window shopping: Electronics, appliances top the list for browsers

An estimated 9.2 million adult Canadians used the Internet to do some window shopping for goods and services in 2005. They accounted for over one half (55%) of all Internet users.

More than 6 out of every 10 of those on-line window shoppers actually wound up making a purchase not on-line but directly from a retailer.

The most popular items for these window shoppers were consumer electronics, such as cameras and VCRs; housewares, such as large appliances and furniture; and clothing, jewelry and accessories and travel arrangements. Many individuals searched for motor vehicles and real estate.

Men were slightly more likely than women to report a direct purchase as the result of window shopping on-line.

Many more men than women reported window shopping for big-ticket items such as consumer electronics and automotive products. For example, 36% of male window shoppers reported browsing for a car, more than double the proportion of women (14%).

On the other hand, more female window shoppers browsed for large appliances and furniture and were almost twice as likely to search on-line for clothing, jewelry and accessories.

Security concerns a possible impediment to e-commerce

On-line security was on the mind of many Canadians and may represent a roadblock to Internet shopping, the survey showed.

Four out of every five adult Canadians expressed a concern about Internet credit card use. Moreover, almost one-half (48%) of Internet window shoppers who reported making a purchase as a result of their on-line search said they were very concerned about using their credit card on the Internet.

The lack of high-speed access to the Internet may also be an impediment. About 50% of Internet users with a high-speed connection at home made an on-line purchase in 2005, compared with just 36% of those without high-speed.

This may be more of a problem for people living in rural and small town areas, with less proximity to retail outlets. They were less likely to report the availability of high-speed telephone or cable Internet service.

Available on CANSIM: tables 358-0135 to 358-0138.

Definitions, data sources and methods: survey number 4432.

Additional data tables on Internet shopping are available on-line. From the Summary tables page, select What’s new? Or select the subject Communications then Internet.

About Statistics Canada

Statistics Canada produces statistics that help Canadians better understand their country�its population, resources, economy, society and culture. In Canada, providing statistics is a federal responsibility. As Canada�s central statistical agency, Statistics Canada is legislated to serve this function for the whole of Canada and each of the provinces. Visit www.statscan.ca