Businesses that leverage e-commerce experience significantly accelerated growth, says PayPal Canada after a recent study. The research involved over 4,000 Canadian small businesses that handle between $30,000 to $3 million in online transactions annually.
The power of online stores is palpable. On the seller’s side, listing goods online is an easy way to extend trade beyond its local geographical region. Considering that 81 per cent of the Canadian population lives in urban areas, trading digitally greatly increases clientele for businesses located in rural settings, where they lack the high traffic of an urban metropolis. Between 2016 and 2017, digital small businesses located in rural parts of Canada grew by 18.5 per cent while urban digital businesses grew by 21.3 per cent. In the same period, suburban businesses saw the highest growth rate of 36.5 per cent. Overall, small businesses that sell through PayPal grew 22 per cent year-over-year in 2017. Offline businesses, on the other hand, only grew by less than one percent.
Certain regions saw significantly higher growth than others. Digital businesses in Nova Scotia saw 47 per cent growth from 2016 to 2017, while Manitoba saw 30 per cent. In Saskatchewan where the population is only 1.7 million, digital businesses grew 10 per cent faster than ones that are offline.
Selling on an international scale also drives growth. Nearly 30 per cent of digital small businesses export to three countries or more. Companies that exported their goods and services experienced three per cent more growth between 2016 and 2017 versus their non-exporting competitors. Additionally, almost 40 per cent of exporters reach more than three markets.
Shopping online is advantageous for buyers as well. Customers can browse, compare, and research items at their leisure. Both sides also benefit from quick, easy, and safe transactions.
Despite the ostensible advantages to selling online, only one in five Canadian businesses sells digitally. The report highlights the untapped digital growth potential in Canada. As more consumers turn to online shopping, sellers need to establish online portals for greater business impact.