How to Start an E-Commerce Business in Canada?

Time to read: 5 minutes

Do you want to move your business forward by entering the Canadian e-commerce market? It’s a great choice—the country neighbors the US, making it much easier from the logistic point of view. Plus, it’s hyper-concentrated, making fulfillment there even more simple. But you cannot enter this market unprepared—you need to understand the market well. This is what we focus on in this article, so read on if you want to get ready to sell your products in Canada.

E-Commerce Sales and Customer Trends in Canada: Market Insights

How big is the e-commerce market in Canada? What do the consumers prefer, and what drives their decisions? These are important questions—you need to know the answers to prepare an effective strategy for your business. Thus, let’s start by analyzing the stats.

General Market Stats

First, here are some general insights that will help you enter this foreign market.

• The revenue in the Canadian e-commerce market is expected to reach US$65.55bn in 2024.
• The annual growth rate (CAGR) for 2024-2029 is projected to average 9.76%.
• Approximately 90% of Canadians live within circa 160 km of the US border, with Ontario being the most populated region.

As a result of the above, the Canadian e-commerce market is large but also easy to cover since you do not need final-mile delivery services all over the country, just in a relatively small area. To add to that, it’s a market with an excellent potential, as:

• 54.0% of internet users in Canada purchase a product or service online at least once a week,
• 70.1% of the population (over the age of 15) purchase a product or service online at least once a year.

It’s also crucial to understand what sells best in the Canadian e-commerce market. According to Digital 2024: Canada, the top product segments include:

• fashion products,
• consumer electronics,
• DIY & hardware,
• food & beverages,
• furniture.

Delivery and Fulfillment

What drives sales in the Canadian e-commerce market? This is perhaps the most important statistic for your business. In terms of delivery and fulfillment services, the Canadians are mostly driven by:

• free delivery (65.2%),
• easy returns policy (45.1%),
• next-day delivery (40%).

Other Important Customer Trends

Finally, let’s look at other crucial trends that may impact your e-commerce business in Canada. What do you need to pay attention to when setting up your store?

• Canadians love coupons and discounts, with 50.2% of them claiming that they drive their purchases.
• 49.3% of Canadian online shoppers are more likely to order your products if you offer loyalty programs.
• Simple online checkout is yet another key factor that will attract shoppers in Canada (with 34.9% pointing it out as a purchase driver)—you need to polish your UX.

Setting Up Your E-Commerce Business in Canada

Since you know the trends inside-out, let’s get to the strategy. What do you need to do to ensure steady sales in the Canadian e-commerce market?

Preparing Your Store

First, look at your store. The better it is, the more likely you are to succeed. What should you pay attention to?

• UX—since Canadians prefer an easy checkout experience, you should ensure that the UX is excellent at all times.
• Languages—Canada has two official languages: English and French. To make your store more accessible, we recommend that you translate it into French.
• Loyalty programs—you should also introduce loyalty programs, where customers can get discounts or credits for large purchases. If you opt for the latter, we recommend using our FreshCredit app.

Polishing the Logistics

While the e-commerce market in Canada is highly concentrated, this does not mean that logistics are super-easy. Yes, they aren’t as difficult as in other countries, but the border between the US and Canada is still quite long, so you need to decide on the strategic points through which you will transport your products.

On the one hand, you could store your products in the US, near the border, but this is not always the best solution, especially if the location isn’t a good US hub for you. However, there is an alternative—as we mentioned in our cross-border fulfillment guide, you can use the reliable fulfillment solution you know: Amazon FBA.

Even if you plan to sell your products via social media or your Shopify store, you can still utilize this fulfillment method. All you have to do is download our MCF Shipping app, which enables you to integrate your fulfillment services for multiple channels via the FBA service.

Legal Considerations

Finally, you should learn about the ins and outs of Canadian law. Start with customs and local e-commerce legislation to learn about the tariffs and extra costs associated with imports. You should also look at exports since that’s how your products are treated when returned by customers.

Make sure to calculate the costs before setting up your store—this will enable you to set your prices more accurately in the new market, ensuring that your profit is optimized.

The Takeaway

The e-commerce market in Canada is big and has great potential, especially since you can use Amazon FBA and US warehouses to distribute your products. If you plan a foreign expansion, this is one of the best directions to target at the beginning—it’s not so different from the US as the markets in the EU, making it great for testing your potential to sell your products abroad.

You may also read: How to Fulfill Shopify Sales Through Amazon FBA in the EU, Mexico and Canada

References:

1. https://www.statista.com/outlook/emo/ecommerce/canada
2. https://www.statista.com/statistics/263742/total-population-in-canada/
3. https://www12.statcan.gc.ca/census-recensement/2021/as-sa/fogs-spg/page.cfm?lang=E&topic=1&dguid=2021A000011124
4. https://datareportal.com/reports/digital-2024-canada

About the author

ByteStand

is powed by savvy Amazon industry vets who have been passionate about eCommerce for a decade each. We’ve worked with over 2,600+ brands, generating hundreds of millions of orders shipped through Amazon FBA/MCF program using the ByteStand app.