Canadians boost online spending

Canadians doubled their online spending last year and will spend even more on the Web this year, a new survey shows. Despite doom and gloom around the technology sector, online sales doubled last year to $4.3 billion and the trend looks good for Web retailers, says the study by Ipsos-Reid.

"Contrary to what the critics are speculating, the results show that b2c e-commerce in Canada is not dead" said Steve Mossop, senior vice-president of Ipsos-Reid. "With the prevalence of doom and gloom reports in this sector over the past six months or so, the news is refreshingly positive. The meltdown in this sector is more a function of the closing of a bunch of Web sites that nobody was visiting-when in fact, more people continue to access the Internet online, more people are purchasing online, and the ones that are buying plan to spend more money next year."

The study shows up to two million Canadians are poised to shop online for the first time this year, with banking, software, books and music heading their shopping lists.

Last year, three trends emerged in Canada: a growing critical mass of online buyers, Canadians purchased more online due to the increased availability and selection among Canadian e-retailers, and increased spending among experienced users.

Almost one-quarter of Canadian adults have made an online purchase, over five million people.

Those who bought online last year expect that their spending will increase in a significant way. Nearly one-half of online shoppers indicate their online spending next year will increase a little (40%), or increase a lot (5%). This is only slightly less optimistic than the 64% who indicated the same last year.

The proportion of online shoppers buying from Canadian sites is increasing. Canadian e-tailers are enjoying an increasing slice of the e-commerce pie, as 63 per cent of online purchasers indicated that their most recent purchase was at a Canadian-based site.

Banking services, downloadable computer software, books, and music remain at the top the list of categories purchased this year. Computer software, tickets to events, clothing hotel and air travel, and consumer electronics round out the top 10.

"The top items that Canadians have purchased over the Internet over the course of the last couple of years has stayed remarkably consistent," said Marcie Sayiner, senior research manager at Ipsos-Reid. "What has increased noticeably is the intent to purchase, which will result in two million new Canadians purchasing online for the first time this year. Clearly, e-commerce is alive and well in Canada."

The "Canadian Inter@ctive Reid Report" is based on two separate data collection instruments. In the first, 1,000 web users from Ipsos-Reid's Canadian Internet Panel are surveyed online. Panelists are chosen through random telephone surveys conducted on an ongoing basis across Canada. Results are complemented by a further 1,500 interviews via telephone with Canadian adults in order to verify results of the panel, and track issues among non-Internet users. The most recent quarterly results were collected between Dec. 27, 2000 and Jan. 7, 2001.

For more information please contact:

Marcie Sayiner
Senior Research Manager
Ipsos-Reid
604-257-3200