CANADA: Electronic Commerce and Technology- 2007 Report

Online sales increased at a double-digit pace for the sixth consecutive year in 2007. Total private and public sector Internet sales hit an estimated $62.7 billion, up 26% from 2006.

Despite the continued strong growth, e-commerce still represents a relatively small fraction of total economic activity. In 2007, online sales of private sector firms accounted for just under 2% of total operating revenue, although this was still an increase from less than 1% five years earlier.

While online sales increased, the proportion of private sector companies that sold goods and services online remained stable at about 8%. In the public sector, some 16% of organizations reported e-commerce sales.

Private sector businesses dominate online sales
Private sector businesses dominated online sales in 2007. E-commerce by private sector firms increased 25% to $58.2 billion, while public sector e-commerce rose 30% to almost $4.5 billion.

Note to readers

The 2007 Survey of Electronic Commerce and Technology covered over 19,000 enterprises across the economy, except for local governments. The enterprise is the organizational unit of a business that directs and controls the resources relating to its domestic organization. Internet transactions that occur between two companies or establishments within the same enterprise are therefore excluded.

The sample was stratified at the two digit or sector level of the North American Industry Classification System (NAICS, 2007) and by employment size category. For analytical purposes, enterprises are classified as either private sector firms or public sector organizations.

Electronic commerce is defined as sales over the Internet, with or without online payment. Included is the value of orders received where the commitment to purchase is made via the Internet. Sales using electronic data interchange over proprietary networks and transactions conducted on automatic teller machines are excluded.

The value of financial instruments transacted on the Internet such as loans and stocks are not considered e-commerce sales, but the service charges received for conducting these transactions over the Internet are included.

CANSIM table 358-0010, "Enterprises that sell over the Internet," has been revised for 2006, based on more accurate information received for the 2007 reference year.

In the private sector, business-to-business sales accounted for 62% of online sales in 2007, down from 68% in 2006. The proportion of online business-to-consumer sales climbed from 32% to 38%.

It is estimated that customers outside Canada generated almost one out of every five dollars (19%) in online sales in the private sector, similar to the last two years.

Enterprises more likely to purchase than to sell online
Firms remained more likely in 2007 to purchase than to sell goods and services online, with just under one-half (48%) of private sector firms purchasing goods and services online compared with only 8% selling online.

The proportion of private sector firms purchasing goods and services online has been increasing steadily since this survey began, while the proportion of firms selling online has remained stable.

In 2007, an estimated 82% of public sector organizations made purchases online, compared with 16% who reported selling online.