The e-commerce market, where consumers and businesses buy and sell products and services entirely through electronic platforms, has grown rapidly in recent years. According to data, global e-commerce retail sales are expected to exceed $7 trillion by 2025. As one of the heaviest internet users in the world, Canada has become a very profitable market in recent years. Export.gov noted that 18.5 million consumers in Canada shop online. With the rapid development of the Internet, more and more people choose to shop online, replacing physical shopping. Especially since Covid-19, many cities have been locked down for a period of time. At that time, people can only stay at home and not go out, which has also led to the popularity of online shopping from external factors. Online shopping requires sellers to provide an integrated platform for online ordering, warehousing, and logistics. E-commerce retail trade will be around $3 billion per month at the beginning of 2022, and about 29 million Canadians are expected to shop online by the end of this year.
Despite the popularity of e-commerce, it was initially relatively slow for Canadian businesses to shift to digital sales and invest in online businesses. Some U.S. sellers have taken advantage of this gap to build their own brands in their neighboring markets Canada. In 2021, U.S. e-commerce giant Amazon is Canada’s most popular online platform, with net e-commerce sales on amazon.ca exceeding $7 million. Amazon topped the list that year in various product areas, 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 Canada.
In a 2021 survey, many Canadian shoppers prefer to shop online rather than in physical stores because of the convenience of shopping online and the ability to save time and money by shopping online. One of the most important factors for Canadian online shoppers is the shipping cost when choosing an online retailer. They will consider the shipping fee when they place an order. Free returns are the most popular among shoppers. Moreover, Canadian shoppers also want to see more technology applied to the online shopping experience.
When it comes to online payments, each country has its own characteristics. According to research, credit cards are the most popular choice in the Canadian online shopping market. Various payment methods are being implemented across platforms and digital payment providers have increased. Most Canadians still insist on paying with credit cards. Overall, Canadians are increasingly willing to embrace the world of e-commerce, become more confident in online shopping, and are increasingly receptive to new payment methods, such as PayPal.
At the same time, each platform has its own e-commerce platform. Amazon, which is well known all over the world, is the same in Canada. Amazon.ca leads the Canadian e-commerce market, with net sales of $9.818 billion in 2021, followed by Walmart.ca of $3.774 billion. Costco.ca is the third with $2.263 billion and Apple.com is the fourth with net sales of $1.67 billion in Canada in 2021.
With the development and expansion of e-commerce in various countries, international e-commerce has also risen. International cross-border e-commerce companies can use the platform to enable sellers to sell directly to consumers and eliminate intermediate parts. When someone places an order to buy a product on the platform, the whole process is smooth, transparent, and affordable. Cross-border e-commerce is an integrated service that combines the processes of ordering, international warehouse, international transportation, domestic transportation, and customs clearance. It connects products from the factory to the buyer’s final destination address.
Canada is the first stop for U.S. e-commerce retailers to begin their international expansion. U.S. online retailers have a big advantage in Canada when it comes to cross-border e-commerce growth. Research shows that Canada is one of the top three markets with the most cross-border shopping. One of the reasons for the rise of cross-border e-commerce shopping in Canada is that local retail brands are not willing to change to online shopping, and they think that they should keep more physical stores. This gives foreign e-commerce brands a great opportunity to enter the Canadian e-commerce market. According to the data, Canada’s cross-border e-commerce shoppers occupy third place in the world now. The first and second places were Brazil and Australia. Geographically, since the United States and Canada are close, the expansion of American retailers to Canada is inevitable. This has made Canada’s cross-border e-commerce business develop faster.
The key to success in the market today is which platform provides an integrated process. Brands need to provide Canada with low-cost shipping and customs clearance. These charges are either shown in the price list or included in the total price. On the other hand, in Canada’s cross-border e-commerce process, shipping costs and effectiveness are large problems, and there are also different rules for logistics and customs clearance from other countries such as the United States to Canada. In terms of transportation, because Canada has different remote and cold areas, transportation can become expensive and complicated. In terms of laws and regulations, each country and even each region have different trade policies and rules. Therefore, according to different locations and trade policies, and other relevant regulations, the platform must consider multiple factors to give customers the best service. In addition, there are some details that need to be considered by the platform in many ways. For example, there are some places that need to provide English and French. Furthermore, there are some areas where winter transportation needs additional consideration to ensure consumer effectiveness.
With the further development of cross-border e-commerce, the international warehouse is also a good way to solve effectiveness. The platform uses its own resources to build its own warehouses in some more concentrated large cities and then transports the products from other countries to Canadian warehouses in advance. Once the customer places an order, the product is directly delivered from the warehouse to the customer’s order address. This saves the time of long transportation from other countries to Canada and customs clearance, and also saves the cost of transportation. International warehouses improve the customer’s shopping experience. So buyers can get better service, and save time and money. The whole process is also more transparent for both sides. International warehousing and logistics will combine data and analysis in the future so that all products and processes are visualized. Once there is a problem in any part of the process, the problem can be quickly found and solved. Sellers and buyers can clearly see the location, effectiveness, and all processes of the product. This is the combination of online and offline integration and internationalization.
Overall, online shopping and cross-border e-commerce in Canada still have a long way to go. Sellers and platforms need to be modified and improved according to local conditions and buyer preferences. Cross-border e-commerce companies need to further integrate data and analysis, and new technologies are needed to support the integrated operation of the platform. In the end, it can be really a state in which both the platform, the buyer, and the seller benefit.
