There’s more to North America than just “America,” especially when it comes to e-commerce. Many people assume that Canada is practically the same as the United States. After all, there truly are many cultural similarities, and both countries speak English. But in reality, the Canadian e-commerce market has some unique characteristics all its own. In this blog post, we will be taking a closer look at them.

Facts and Figures

Canada is the second largest country on earth with an area of almost ten million square kilometers. However, it has only 38.8 million inhabitants—less than half as many people as Germany, and about 3 million less than Poland. Most of those people are concentrated in the southern part of Canada, near the border with the United States.  The northern part of the country is only sparsely populated.

The cities of Montréal, Toronto, and Vancouver are internationally well-known. However, the capital of Canada is the comparatively small city of Ottawa. It is on the border between the English-speaking province of Ontario and the French-speaking province of Québec. Thanks to it’s location, it geographically connects the two linguistic groups.

Canada is a parliamentary democracy and a constitutional monarchy. It is divided into ten provinces, which each enjoy significant political autonomy. There are also three territories in the north of the country, which are mainly governed by the national government in Ottawa.

Canada is bordered by the United States to the south and by the American state of Alaska to the northwest. It stretches from the Pacific coast in the west to the Atlantic in the east. The Canadian Arctic Archipelago, a collection of islands off the mainland in the northeast, is located in the Arctic Ocean.

Canada’s size means that it is home to a wide variety of vegetation and climate zones. They range from the rainforest on Vancouver Island in the west to the snow-covered peaks of the Rocky Mountains, to Niagara Falls near Toronto and the icebergs in Newfoundland. Canada is known for its breathtaking natural scenery and is a popular destination for outdoor and adventure tourists. If you were to cross the country from coast to coast, you would go through up to six different time zones.

The official currency is the Canadian dollar (CAD). The Canadian dollar is usually valued slightly lower than the US dollar. Over the past 10 years, the exchange rate has hovered at around $CAD 0.65 – 0.75 cents per euro, give or take.

Trends & Insights

Canada may have a relatively low population, but it is a major economic player. Although it is only the 38th most populous country in the world, it is a member of the G7 and one of the world’s leading industrial nations. In terms of GDP, Canada ranked ninth globally in 2022.

E-commerce in Canada is also booming, with nearly eight out of ten Canadians shopping online. This number has been rising continuously over the past several years, and the trend is expected to continue.

The excellent internet coverage in Canada makes online shopping exceptionally easy. As of January 2023, Canada had over 36 million internet users—nearly 94% of the country’s total population. Mobile devices such as tablets and smartphones are also widespread. In 2022, 86% percent of survey respondents reported accessing the internet from a desktop/laptop computer, while 75% reported using a smartphone / mobile phone.

The Canadian government is working hard to provide fast internet to all rural and remote regions of the country by 2030. In 2021, it invested over CAN$360 million to improve high speed internet coverage in rural Ontario.

However, Canada’s size poses a challenge for e-commerce providers.  In very rural and remote areas, the Canada Post is often the only delivery option. Faster, private services such as DHL and FedEx do not provide services to these locations.

Currently, the Canadian e-commerce landscape is dominated by US giants, including Amazon, Walmart, and the wholesale chain Costco. In 2021, Amazon.ca generated net sales of US$9.8 billion, followed by walmart.ca with US$3.8 billion. Third place is taken by costco.ca with revenues of US$2.3 billion.

However, in recent years, many Canadian merchants have intensified their efforts in online retail. Canadian-based companies such as Hudson’s Bay and Canadian Tire (which sells much more than just tires!) have gained considerable market share. In surveys, two-thirds of Canadians say they prefer to shop with local businesses whenever possible.

Shopping Behavior and Preferences

According to a 2023 study by Statista, clothing and shoes are the two most popular categories for online purchases. Electronics and media are also very popular, accounting for 28% percent of the country’s e-commerce market share.

The cost of shipping is a critical factor for consumers when choosing an e-commerce retailer. In a 2021 survey, 80% of shoppers reported that they consider the cost of shipping, and 61% considered free returns as a must-have.

Much like their counterparts in the US, Canadians prefer to pay for their online purchases with credit cards or debit cards. Digital wallets are also gaining in popularity. Even when shopping in brick-and-mortar stores, Canadians tend to pay by card or app. Cash is used relatively infrequently.

Language and Localization

One important difference between Canada and the United States is that Canada is officially bilingual. While English is the official and only language in eight of the ten Canadian provinces, the province of New Brunswick and the three territories are bilingual. In the largest Canadian province of Québec, however, French is the only official language. Citizens have the legal right to receive information and service in French, and penalties can be imposed if French is not listed first on menus or signs. About 85% of all French-speaking Canadians live in Québec, comprising about 22% of the total Canadian population.

All national services and institutions are bilingual, and education in both official languages is offered throughout the country. There are also radio and television stations in both English and French. To meet legal requirements, companies targeting the entire Canadian market must provide equally developed website versions in both languages.

When localizing your e-commerce website, there are some key points that you’ll want to bear in mind. Not only will you need to offer a French and an English version of your website, but each of these languages will need to be localized for Canada specifically.

While spoken Canadian English sounds very much like the English spoken in the US, Canadian English has its own spelling and grammatical rules that are different from both US English and UK English. Québecois French also differs significantly from the French spoken in France. If you already have a French and/or English version of your website available, these won’t need to be translated from scratch, but they will need to be adapted for a Canadian audience.

Customs and Importation

In 2017, the Comprehensive Economic and Trade Agreement (CETA) provisionally went into force. This greatly simplifying trade between the EU and Canada. Among other things, the agreement eliminates or lowers trade barriers, tariffs and export related costs and simplifies customs procedures for imported products. Canada also has a free trade agreement with the United States (NAFTA — the North American Free Trade Agreement). This means that, if you have already expanded to the US and have a warehouse there, it would be very easy to start serving Canadian customers as well.

Conclusion

As a wealthy, highly developed country with an affinity for the internet, Canada is a very appealing market for European e-commerce providers. If you are already selling to customers in the US, expanding to Canada would be a relatively simple next step—particularly if you have a US-based warehouse. Canadian customers have similar preferences and needs to their American neighbors, as can be seen by the success of so many American brands in the Canadian e-commerce landscape.  The CETA trade agreement means that European businesses can very easily export to Canada.The greatest challenge  will be localizing your website to serve both French and English-speaking Canadians.



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autor_eurotext_100Author: Eurotext Editorial Team

We explain how internationalization works, provide tips for your translation projects and outline some of the technology and processes used. We also report on current e-commerce developments and cover a range of language-related topics.