E-Commerce in Canada 101: A Seller’s Guide to Online Success

E-commerce in Canada is booming! How does this affect businesses? This blog post will equip you with the knowledge and strategies to thrive in the Canadian market. Prepare to discover the secrets of profitable online retail sales in the e-commerce landscape in Canada.

Key Takeaways

• The Canadian e-commerce market is experiencing remarkable growth, with revenue projected to reach CAD 68.17 billion by 2023. This is supported by a robust compound annual growth rate (CAGR) of 14.50% from 2022 to 2027.
  
  
• As of 2022, 90% of Canadians have internet access, a significant rise from 77% in 2010, and 83% of Canadians use smartphones, up from 40% in 2012.
  
  
• Over 27 million Canadians, accounting for 75% of the population, made online purchases in 2022, highlighting the extensive adoption of e-commerce.
  
  
• Amazon Canada leads with 15.9 million monthly visitors, representing a significant portion of the online shopping population. Its largest user demographic is individuals aged 25-34, with males constituting 60% of users.
  
  
• Despite not disclosing specific user numbers, Walmart Canada attracts over 10 million unique monthly visitors, with 73% of its traffic coming from mobile devices.
  
  
• Costco Canada’s website garners 1.8 million unique monthly visitors, with traffic primarily from desktop users. Apple Canada holds a strong market presence with 3.4 million unique monthly visitors and a 10% share of the Canadian e-commerce market.
  
  
• Consumer electronics lead with a market size of USD 15.12 billion in 2023 and a projected annual growth rate of 0.74% from 2023 to 2028.
  
  
• The fashion and apparel sector also thrives, with the market expected to reach CAD 34.3 billion in 2023, following a 19.6% growth in 2022.
  
  
• Home goods are increasingly sought after, with the Canadian furniture market anticipating a 3% CAGR by 2028.
  
  
• Personal care and beauty products are in high demand, and consumer spending on cosmetics is projected to reach CAD 10.7 billion by 2023.
  
  

How Big is E-Commerce in Canada?

The demand for e-commerce is soaring in Canada as Canadian consumers increasingly prefer the convenience of online shopping. With a tech-savvy population and expansive geography, Canadians seek the ease of purchasing diverse products from the comfort of their homes.

Factors like busy lifestyles, accessibility, and robust digital infrastructure contribute to the expanding trend. As a seller, tapping into this demand presents a profitable opportunity to reach a broader audience, enhance customer experiences, and stay competitive in the evolving retail landscape.

How big is the Canadian e-commerce market?

The Canadian e-commerce market is a substantial and swiftly expanding sector expected to reach significant milestones, with revenue projections soaring to an impressive CAD 68.17 billion by 2023.

This trajectory shows a strong 14.50% compound annual growth rate (CAGR) for 2022-2027. The ongoing increase in the Canadian e-commerce landscape can be attributed to numerous factors driving its growth.

Contributing elements include a tech-savvy consumer base, increasing internet penetration, shifting consumer preferences, and the transformative impact of the COVID-19 pandemic, which accelerated the adoption of online shopping.

• Increasing Smartphone and Internet Usage. The remarkable rise in internet and smartphone penetration over the years can be substantially linked to the growth in online purchasing inside the Canadian e-commerce business. As of 2022, 90% of Canadians have internet access, a substantial increase from the 77% recorded in 2010.
  
  Simultaneously, the percentage of people using smartphones has increased dramatically, from 40% in 2012 to 83% in 2022. In addition to evolving digital channels, this general connectivity has significantly improved Canadians’ online shopping ability, making it easier and more convenient.
  
  
• Growing Preference to Shop Online. From the figures indicated earlier, we can notice a cultural shift in Canada’s buying trend. More and more Canadians are embracing the convenience and variety of possibilities e-commerce platforms offer. In 2022, we witnessed a substantial milestone, with over 27 million Canadians engaging in online purchases.
  
  With 75% of the Canadian population, this signifies a widespread acceptance of and comfort with the digital shopping experience. The growing number of online transactions underscores the evolving consumer preferences and the crucial role of e-commerce in catering to Canadians’ demands.
  
  
• The COVID-19 Pandemic. Canada’s e-commerce landscape experienced a significant acceleration in growth owing to the unprecedented impact of the COVID-19 pandemic. Many Canadians quickly switched to online shopping to avoid in-store purchasing, driven by worries and fears about their health and safety. Even in the post-pandemic era, the habits formed during the health crisis have led to a lasting shift in consumer behaviour, cementing the role of e-commerce as a preferred and reliable channel for Canadians.

Source: Statista, eMarketer

How many online Canadian retailers are there as of 2023?

It’s challenging to determine the actual number of online Canadian retailers. The reason is the dynamic and ever-evolving nature of the e-commerce industry. It’s also hard to determine the real definition of an “online retailer..”

However, Canadian online and in-store businesses offer their services through an average of five different digital sales channels, showcasing a commitment to providing Canadian consumers with diverse avenues for engagement. In 2023, 85% of all Canadian businesses want to broaden their horizons by adding more online platforms to their operations.

In addition to expanding sales channels, an intriguing trend in customer data is observed in the Canadian retail industry. 72% of retailers engaged in retail e-commerce sales now leverage Facebook as a sales platform, marking an increase from 65% reporting in the previous year.

Additionally, Instagram has emerged as the second most favoured social media site for retail transactions, with 65% of retailers facilitating customer purchases through this platform, showcasing a substantial increase from the 55% recorded in 2022.

Source: SquareUp

What are the common issues faced by Canadian businesses?

While e-commerce has numerous things to offer, as the seller, it is your responsibility to know and understand the common issues Canadian businesses face.

Shipping and Logistics. The expansive distances between regions contribute to higher shipping costs and varied delivery times, demanding strategic planning. Addressing these complexities is crucial for ensuring efficient and cost-effective order fulfillment, a key concern for Canadian sellers.

Online Payments. Online payments are a common challenge in Canadian e-commerce due to diverse payment preferences and the need for secure transactions. Adapting to various payment methods, including popular ones like credit cards and digital wallets, while ensuring robust cybersecurity measures is crucial for fostering customer trust and facilitating seamless transactions in the Canadian online marketplace.

Digital Strategy Effectiveness. Effective digital marketing is a common issue in Canadian e-commerce due to the need to stand out in a competitive landscape. Crafting strategies that resonate with diverse consumer segments leveraging various social media platforms, and optimizing online visibility are essential. Maintaining success in the ever-changing Canadian e-commerce business requires adjusting to changing trends.

E-Commerce Regulations and Compliance. Navigating Canadian e-commerce regulations and compliance is challenging for sellers due to the complex legal environment. Paying close attention to tax rules, data privacy regulations, and consumer protection laws is necessary. Ensuring compliance fosters customer trust and avoids legal complications.

Technological Advancements and Adaptations. Keeping pace with technological advancements is a common challenge for Canadian e-commerce sellers. The fast-evolving digital landscape demands constant adaptation to emerging technologies, user preferences, and cybersecurity measures.

What are the top e-commerce companies in Canada?

Starting an online business in Canada requires a compass pointing to the leading e-commerce giants shaping the online and traditional retail sales landscape. Let’s check Canada’s top 5 e-commerce companies, navigating through the virtual aisles where innovation, convenience, and consumer trust converge.

Amazon Canada

As of 2023, Amazon Canada has a visitor count of 15.9 million, solidifying its status as the leading e-commerce platform in the country. This figure implies that nearly half of all Canadians engaged in online shopping frequent Amazon Canada at least once a month.

The expansive user base underscores the platform’s popularity and positions it as a pivotal marketplace for sellers. It grants them unparalleled access to an extensive audience, reinforcing Amazon Canada’s dominance in the Canadian e-commerce market.

The largest age group comprises individuals between 25 and 34 years, closely followed by those aged 35 to 44 and 18 to 24. In terms of gender, approximately 60% of users are male, while 40% are female.

Amazon Canada users geographically span all provinces and territories, with Ontario housing the largest concentration. This insightful breakdown enables sellers to craft targeted campaigns that resonate with the diverse demographics present on the platform, optimizing their reach and engagement.

Source: Statista, Insider Intelligence, Semrush

Walmart Canada

While the exact user count for Walmart Canada remains undisclosed, the retail giant undeniably commands a substantial presence in the Canadian e-commerce sphere. The website Walmart.ca draws in over 10 million unique monthly visitors.

In addition, Walmart.ca exhibits a noteworthy trend, with over 73% of its traffic originating from mobile devices. With a growing number of consumers favouring purchasing through smartphones and tablets, it highlights mobile engagement and the importance of responsive and user-friendly interfaces. While Walmart Canada‘s user base is smaller than Amazon Canada’s, it still commands a significant audience of potential customers.

Source: Semrush

Costco Canada

SimilarWeb says Costco Canada’s own website now garners an estimated 1.8 million unique monthly visitors. A significant and steady stream of distinct visitors like this highlights the platform’s popularity and reach, offering a desirable channel for sellers looking to get a broad and varied audience in the Canadian e-commerce market.

Costco Canada’s online presence manifests a dynamic interaction across various platforms. Around 65% of its website traffic comes from desktop computers, demonstrating the continued relevance of traditional computing devices. Simultaneously, 35% of traffic originates from mobile devices, showcasing a noteworthy mobile engagement trend.

Geographically, most of Costco Canada’s website traffic is derived from within Canada, followed by substantial contributions from the United States and the United Kingdom. This diversified traffic distribution reflects the platform’s global appeal, with many users accessing it from different regions and through multiple devices.

Source: SimilarWeb

Apple Canada

Apple Canada commands a substantial presence in the Canadian e-commerce market, particularly dominating the electronics and consumer goods sectors. A recent 2023 report by Statista shows Apple Canada’s prominence, ranking it as the second-largest e-commerce retailer in the country. It boasts a noteworthy market share, capturing approximately 10% of the Canadian e-commerce landscape. According to SimilarWeb, Apple Canada’s website experiences a considerable traffic influx, with an estimated 3.4 million unique monthly visitors.

Source: Similar Web

What are the top 5 e-commerce websites in Canada for sellers?

Suppose you’re a seller wanting to have an online store and begin your e-commerce journey. In that case, these five websites offer opportunities to showcase your products and reach a diverse audience. Let’s check the platforms that define the Canadian e-commerce landscape, where innovation, user engagement, e-commerce site, and seller success converge.

Amazon

Amazon provides online stores with a perfect avenue due to its massive user base, efficient logistics, and widespread trust among Canadian consumers. Its comprehensive platform offers sellers visibility, ensuring exposure to a diverse audience and fostering opportunities for successful transactions in the thriving Canadian e-commerce market.

As of 2023, Amazon is a bustling marketplace hosting a diverse community of over 80,000 sellers. Amazon’s seller community is a rich tapestry, including small businesses, individual sellers, and large corporations. The product selections available on the platform are vast, ranging from books and electronics to groceries and furniture, providing a comprehensive shopping experience for Canadian consumers.

Beyond commerce, the growth of Amazon’s seller base is the platform and company’s proof of being a digital economy engine, fostering job creation and generating billions of dollars in net sales.

Source: AnnualReport.Com

eBay

eBay offers an ideal platform for Canadian online sellers, providing a diverse marketplace where sellers can reach a broad audience. With its established reputation, user-friendly interface, many markets and various product categories, eBay Canada empowers sellers to connect with buyers and thrive in the dynamic Canadian e-commerce landscape.

Beyond all expectations, eBay has an enormous network with more than 34.23 million visits in the last 3 months. This large and lively community highlights the wide range of sellers that make up eBay’s dynamic marketplace, creating a rich atmosphere of various offerings, rich interactions, and plenty of chances for Canadian online merchants to sell and reach a worldwide audience.

Source: Semrush.com

Etsy

Etsy proves to be an excellent marketplace for Canadian online sellers, offering a unique and artisanal-focused platform. With a dedicated audience seeking handmade and vintage products, Etsy provides a niche market for Canadian sellers to showcase their craftsmanship, connect with like-minded buyers, and thrive in the diverse and creative e-commerce landscape.

According to Etsy’s Annual Report for 2022, the marketplace has a remarkable community of 7.5 million active sellers and 95.1 million active buyers. These impressive figures highlight Etsy’s large and dynamic platform, providing Canadian online sellers with an extensive and diverse audience to showcase their unique, handmade, and vintage offerings.

Source: Blogging Wizard

Shopify

Shopify is an exceptional platform for Canadian online sellers, offering a user-friendly interface and robust e-commerce software tools.

With customizable storefronts, secure payment options, and seamless integration, Shopify empowers sellers to create, manage, and grow their online businesses efficiently, providing a solid foundation for success in the Canadian e-commerce landscape.

Over 4 million merchants actively utilize the Shopify platform, testifying to its widespread appeal and effectiveness. Shopify’s 2023 first-quarter report offers sellers on the platform a thorough review of the ever-changing e-commerce industry with insightful updates and stats.

Source: Pop Up Smart

BigCommerce

BigCommerce is an excellent platform for Canadian online sellers, offering robust e-commerce solutions. With scalable options, customizable storefronts, and powerful features, BigCommerce empowers sellers to build, grow and optimize their online businesses effectively. Its user-friendly interface and diverse integrations make it a compelling choice for success in the Canadian e-commerce market.

Currently, BigCommerce hosts 45,363 live stores, showcasing its robust presence in the e-commerce landscape. The website has maintained steady, incremental growth quarter-over-quarter in recent years, aligning with the global shift towards online commerce. In the 3rd quarter of 2023, BigCommerce experienced a 5.5% quarter-over-quarter increase in stores and a substantial 27% year-over-year growth, affirming its resilience and competitiveness in the ever-evolving online retail arena.

Source: Store Leads

What are the popular product categories and trends Canadian online stores should consider?

For Canadian sellers seeking to stay ahead, knowing the popular product categories and trends reshaping online stores will provide you with insights and opportunities to elevate online businesses to new heights.

Consumer Electronics

The constant release of new gadgets and technological advancements fuels consumer interest, prompting them to compare features, read reviews, and access numerous options online, making e-commerce the go-to platform for those looking to purchase smartphones, laptops, wearables, and other electronic devices with convenience and efficiency.

In 2023, the consumer electronics market is a significant player with a USD 15.12 billion revenue poised for consistent annual growth at 0.74% (CAGR 2023-2028). The Telephony segment is the largest in this expansive market, commanding a substantial volume of USD 6.3 billion in 2023. This data reflects the robust and evolving nature of the consumer electronics sector, a world where telephony remains a dominant force driving market expansion and technological innovation.

Source: Statista

Fashion and Apparel

Fashion apparel is a thriving category in the Canadian e-commerce industry, encompassing diverse clothing, accessories, and footwear. Canadian online sellers cater to a broad spectrum of consumer tastes, offering trendy and timeless fashion options.

Canadians can easily explore and name local businesses and buy the newest styles with convenience and accessibility thanks to the simplicity of online purchasing.

In 2022, the Canadian fashion and apparel industry displayed signs of recovery post-pandemic, experiencing 19.6% growth compared to 2021.

The industry’s trajectory continues with a projected growth of 3.6% in 2023, with the total retail sales market anticipated to reach CAD 34.3 billion. These figures indicate a resilient and optimistic outlook for the Canadian fashion industry.

Source: MadeinCa.Ca

Home Goods

The increasing popularity of interior styling and home improvement makes home goods popular in Canadian e-commerce. With an emphasis on creating comfortable and aesthetically pleasing living spaces, Canadians turn to online platforms for a diverse range of home goods.

The convenience of exploring and purchasing furniture, decor, and household items online aligns with consumer preferences, making it a sought-after category for practical and lifestyle-enhancing purposes.

Ranked among the globe’s top 10 furniture producers, the Canadian furniture industry is positioned for substantial growth. The Canada Home Furniture Market anticipates a commendable CAGR of 3% by 2028, with the likelihood of even higher CAGR throughout the forecast period.

Fueled by a streamlined production and distribution process and a surge in consumer spending capacity driving demand for household furniture, the Canadian home furniture market promises exciting growth in the foreseeable future.

Source: Mordor Intelligence

Personal Care and Beauty Products

Personal care and beauty products thrive in the Canadian e-commerce industry due to the increasing emphasis on self-care and beauty routines. Canadians seek numerous skincare, cosmetics, and grooming products online for convenience and access to a wide selection.

The e-commerce platform provides a seamless and personalized shopping experience, making beauty products a popular category.

Based on projections, the Canadian beauty and personal market is expected to grow to CAD 10.7 billion by 2023. In 2019, Canadian households devoted an average of CAD 1,384 to personal care products, encompassing cosmetics. Quality dictates products, encompassing cosmetics.

Quality dictates product choices for over half of Canadian consumers. Lip makeup sales are projected to hit CAD 525.8 million, and eye makeup sales are forecasted to reach CAD 629.7 million by 2027.

These figures illuminate the thriving and evolving landscape of beauty and personal care in the Canadian market.

Source: MadeinCa.ca

Sustainable and Eco-Friendly Products

Sustainable and eco-friendly products have gained popularity in the Canadian e-commerce industry in 2023 due to a growing environmental consciousness among consumers.

Canadians increasingly prioritize eco-conscious choices, prompting a surge in demand for products that align with sustainable practices. E-commerce platforms offer a convenient avenue for environmentally conscious shoppers to access and support sustainable options.

As of year-end, the cumulative sustainable bond issuance in Canada reached a substantial CAD 49 billion, setting the stage for the market to surpass the significant milestone of CAD 50 billion in early 2022.

This impressive achievement involved 32 issuers in 2021, with eight contributing multiple bonds to the market, demonstrating the growing interest in sustainable financial instruments within the Canadian landscape.

Source: Queensu.ca

Final Thoughts

By now, you’re armed with knowledge to understand the Canadian e-commerce market. Remember, the key to success lies in continuous learning and adaptation. With the data presented above, you’re on your way to building a thriving online business.

Aman Chopra

Aman looks after the content marketing department at Stallion Express. He is passionate about helping businesses grow by providing informative and up-to-date trends in the eCommerce industry. Outside the office, you can find him on the soccer field cheering on Real Madrid.