Canada is widely known as a significant trade partner for the United States. Canada’s imports were more prominent than exports in 2020, $510.29 billion compared to $477.31 billion. The US represented 57% of total imports, while China was 11% and Mexico was 5%.
As for cross-border online sales, as seen in the graph below, the US has the largest share, as consumers buy most products from this country, second China and thirdly the UK.
As can be seen, US brands have a big opportunity to enter and penetrate the Canadian market.
For this reason, we are discussing further market & economy overview, Digital overview, e-commerce outlook, and how BorderGuru can help your brand expand into a country full of opportunities to increase your international sales.
Population & Economy overview
Canada has a population of 38.23 million. The most populous provinces are Ontario, Quebec, and British Columbia. The median age is 41.8 years, and the largest age group in percentage is people between 25 and 54 years (39.81%), as can be seen in the image below:
The official languages are English and French, and the currency is the Canadian dollar. The exchange rate is approx. 1 USD = 1.28 CAD. In terms of Economy, Canada is among the top ten largest economies in the world. In 2020, it was 9th place with a GDP per capita of $43,295 and a Purchasing Power Parity (PPP) of $1.74 trillion.
International trade is an essential component of Canada’s Economy. Exports and imports account for about one-third of GDP.
Digital Overview
Canada is considered one of the largest online markets in America, with 36.39 million users in January 2022. It also has a high percentage of Internet users, as seen in the image below, meaning that almost 100% of the population has access to the Internet. It is also worth noting that a high percentage of the population uses a mobile device to access the Internet.
Regarding social media, a large percentage of the population is a member of a social media platform (87.1%). In January 2022, the number of users was 33.30 million. The most popular social media platforms are YouTube (33.30m), Facebook (20.90m), LinkedIn (19m) and Instagram (17.40m). It is important to be aware of the social media users for marketing your products, where you can get the most traction and have higher opportunities to increase sales.
According to Statista, in 2021, the most popular online activities conducted by Internet users in Canada were email 85%, online banking 67%, social media 58%, access news headlines 53% and online shopping 48%. Shopping is one of the five most important activities as e-commerce sales grew considerably; As we will see next, “E-commerce Outlook.”
E-commerce outlook
Global e-commerce sales have grown significantly since 2019 and even more during the COVID-19 pandemic. In Canada, it happened the same way; and during the pandemic, online sales increased as online shopping became the new normal for all generations. Now that restrictions have been lifted and shops are open, purchasing behavior has changed slightly for older generations. Still, for Millennials and Generation Z, online shopping will continue to increase.
In 2021, Canada was the tenth largest e-commerce market with a revenue of $35 billion, ahead of Australia and Indonesia. In the same year, there were 27 million e-commerce users in Canada, representing 72.5% of the total population, and is expected to grow by 77.6% in 2025.
Cross-border purchases are also still popular with Canadian consumers, as they believe there is a better selection of products and lower prices when buying from other countries. As it has already been shown, the US is a significant player in the Canadian market, and consumers expect to continue to do most of their online shopping from US brands.
As for the product categories, the top 5 are clothing (50%), shoes (32%), entertainment (30%), consumer electronics (30%) and cosmetics & body care (26%).
This graph shows that US brands in the sectors of fashion and lifestyles have an excellent opportunity to continue to capitalize and that new players can start to capitalize on this ever-growing e-commerce market.
For US brands to succeed in Canada as a cross-border e-commerce merchant, it is crucial to consider consumers’ expectations, needs and wishes to offer them the best possible online experience and to be able to attract and convert them into loyal customers.
Top 5 aspects to consider that strongly influence Canadian consumers’ online purchasing decisions
1- Word of mouth, social media influencers, video content, and online customer reviews strongly influence Gen Z and Millennial consumers’ purchasing decisions.
2- Make the returns policy friendly: 63% of shoppers have abandoned their carts because of an unclear or complicated returns policy.
3- Prioritize delivery: 58% of consumers are influenced by delivery speed, and 46% are motivated to buy from brands that deliver on the expected date.
4- Customer experience: 46% of consumers are influenced by loyalty or reward programs. It is also essential to consider promotional content.
5- Consider the environment: 37% of consumers prefer brands that are aware of their carbon footprint and are committed to reducing it.
With BorderGuru, you can expand your brand to Canada and other 200 countries without any hurdles and offer your customers the best online shopping and shipping experience. We calculate all taxes and duties in real-time and handle them for you. We provide your customers with custom-clear orders and competitive shipping prices. They will never have to deal with additional surprise fees at the delivery time.
Contact us now and expand your global business without the challenges of international compliance!