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A COMPARATIVE VIEW OF E-COMMERCE AND BUSINESS USE OF THE INTERNET IN CANADA

Source: e-CommerceCanada

Posted on September 8, 2000

      Statistics Canada released a survey on the topic of E-commerce and business use of the Internet on August 10, 2000. This Canadian survey is very encompassing and unequalled in its scope save for a similar survey done in Australia.

      Canada leads the way with consumer penetration of the Internet. However, it lags behind the U.S. for business penetration of the Internet according to a survey released on June 19, 2000 by The Boston Consulting Group and Retail Council of Canada. This survey talks in part only about the retailing industry and it puts forward reasons why Canada lags behind the U.S.

Statistics Canada Survey Report

The survey report found that 0.2% of the total economic activity in Canadian businesses was from the use of the Internet to sell goods and services. Viewed from another perspective, one out of 10 Canadian businesses used the Internet to sell goods and services in 1999. The statistics presented in the survey present a breakdown of public and private sector use of the Internet. They are further broken down under those two categories into different industries. One obvious observation is that although the public sector sales are but a fraction of that of the private sector the public sector is much more attuned with e-commerce than the private sector.

The BCG Survey

The Boston Consulting Group and Retail Council of Canada released a survey which found that 10% of Canadian households are "Broadband Users" while in the U.S. that number reaches only 6%. Unfortunately, that does not translate into the same percentage of purchases. The opposite is quite true. Only 43% of Canadians who browse the Internet have ever purchased online while in the U.S., that corresponding figure is at 51%. How can this reversal be?

      The BCG survey offers several observations as explanation for this. Canadians are more concerned with privacy issues than Americans, the ratio is 89% to 77% respectively. A similar ratio is observed with concerns of privacy, the Canadians being the more concerned at 74% to Americans' 62%.

      While looking only at the retailing industry, another contributing factor reported in the BCG survey is the percentage of the top 50 retailers who operate a Web Site. The ratio of domestic retailers that have a Web Site is 54% for Canadians and 84% for Americans. Furthermore, it is not surprising that Canadians purchase less over the Internet when a lesser percentage of their retailers operate a transactional Web Site. In this instance the ratio is 30% for Canadians and 56% for Americans.

      The BCG survey predicts that the Canadian online retailing market will reach 15.1 billion Canadian dollars in size by 2003 from its 2.0 billion Canadian dollars in 1999. For its population size, Canada puts in a good show coming in third overall behind the U.S. and Japan in terms of online retail market size (U.S. at 49.0; Japan at 2.3; and Canada at 2.0 billion Canadian dollars). Canadians are loyal customers enjoying a repeat customer rate of 47% compared to Americans' 41%. However, for these figures to remain where they are or even to improve Canadian retailers will have to improve on the due fulfillment of orders. Canadians retailers have a poor performance record in not filling at all 12% of their orders while Americans are only at 6%.




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