Online sales in Canada marked the fifth consecutive year of double digit growth in 2006 as they surged 40% to $49.9 billion.

Four sectors led the way, with manufacturing, transportation and warehousing, wholesale trade and retail trade accounting for over 60% of overall sales (18.5%, 17.9%, 14.2% and 10% respectively).

The retail sector was one of the fastest growing industries, with sales figures nearly doubling over their 2005 numbers as they reached $4.7 billion. Large retail firms with more than 100 employees increased their online participation in 2006. More than one third conducted e-commerce and 88% had a website.

In the industry as a whole 46% of retail firms had a website, up from 42% in 2006. Thirty nine per cent of retailers felt that the goods and services they offered did not lend themselves to Internet transactions, down from 50% in 2005.

Across all sectors, companies no longer believed cost reductions were the main benefit of e-commerce. The majority of firms said they believed that the main benefits of e-commerce were

1. the ability to reach new customers; and
2. better coordination with suppliers, customers and partners.

Businesses in manufacturing (50%), information and cultural firms (59%) in particular believed that online business enabled them to reach new customers.

Business use of website, broadband up slightly

Forty per cent of all private companies have a website, and among those businesses the majority use their website to provide information about their company and its products and services. The use of broadband in the corporate world is becoming more universal. Approximately 85% of firms used high speed in 2006, an increase from 80% in the previous year.

A closer look at the 2006 numbers

• Overall, 8% of Canadian firms were involved in e-commerce last year, up slightly from 7% in the previous year.
• The retail sector saw the greatest increases in online sales, with more than 15% of firms involved in e-commerce last year compared to 10% in 2005.
• The total value of online sales for private firms rose 40% to $46.5 billion.
• In the public sector e-commerce sales rose 17% to $3.4 billion.
• While retail trade reached $4.7 billion last year these transactions accounted for just over 1% of total retail sales.
• Business-to-business (B2B) transactions accounted for the vast majority (68%) of online sales.
• 45% of Canadian firms made purchases online.

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