In early 2022, e-commerce retail trade sales amounted to around three billion Canadian dollars per month, and approximately 29 million Canadians were expected to purchase online by the end of the year. Revenue generated within the retail e-commerce market in the North American country is expected to surpass 90 billion U.S. dollars by 2025, nearly double the revenue in 2021.
A slow-grown e-commerce sectorDespite the rise of e-commerce, initially, Canadian businesses were relatively slow to shift towards digital sales and invest in online presence. This gap was utilized by major U.S. players to step in and establish their brands in the neighboring market. In 2021, the U.S. e-retail giant, Amazon, was the most popular online platform in Canada, with e-commerce net sales reaching over seven million U.S. dollars on amazon.ca. Amazon took the top spot in various product segments that year, including food and personal care, electronics, and media. Other U.S. companies such as Walmart, Costco, and Apple are also among the top online platforms in the country.
When asked about their shopping behavior in a 2021 survey, many Canadian shoppers preferred online to in-person purchases due to both the ease and convenience of online shopping as well as the ability to save money while buying online. These consumers still have high expectations though—most Canadian online shoppers consider shipping costs to be a deal maker or breaker when selecting an online retailer to buy from. Free returns were also well-sought after among shoppers. Canadian shoppers also hope to see more tech features implemented into the online shopping experience. For example, nearly eight in ten Canadian online shoppers want digital try-ons and virtual appointments from e-commerce platforms.
What do Canadians buy online?Of the leading e-commerce categories in Canada, two stand out above the rest: electronics and fashion. These two segments are nearly equal in overall market share, with electronics and media accounting for 28 percent of the country’s e-commerce market and fashion at 27 percent in 2022. In terms of intended online spending, electronics also edges out clothing and footwear for the first place by a slim margin. However, fashion was the most purchased category online among Canadian digital buyers in 2022.
While progress in Canada’s e-commerce industry initially had a slow start, new innovations and trends continue to make e-commerce more accessible. Market forecasts suggest that the sector is set to grow significantly in coming years, particularly, the online food segment. As more Canadian retailers and consumers explore and utilize the benefits of e-commerce, these forecasts are likely to come to fruition.