Canadians’ appetite for cross-border online shopping hasn’t abated, according to a new global survey from Paypal and Ipsos. E-commerce has made it easier for consumers to send money out of the country, but retailers can take heart – even though many Canadians are buying abroad, most are still spending the bulk of their budget at home.
The survey, conducted by Ipsos from September to November, asked 17,500 consumers in 22 countries about their online shopping habits over the past year. Of the 800 participants in Canada, 63% shopped online at least once in 2014, and of those, 73% shopped at a store outside Canada at least once.
That puts Canada fourth out of all the markets surveyed in percentage of online shoppers who shop internationally – behind Austria (83%), Israel (82%) and Australia (75%).
“As the world seems to shrink from a virtual perspective, cross-border shopping is increasing and increasing,” said Paypal Canada head of consumer marketing Kerry Reynolds. She said she was surprised that the trend was marked all over the world, not just in Canada.
By now Canadian retailers are well acquainted with the threat of cross-border competition. But the news wasn’t all bad – Paypal also found that the majority of Canadian online shoppers (71%) are spending at least half their budget in Canada. One quarter (26%) of Canadians shop online exclusively with domestic retailers, while only a small minority (8%) are spending all their online budget outside the country.
Electronics is a particularly strong category for domestic shopping in Canada, with only 16% of shoppers saying they buy electronics from outside the country. That’s a much smaller fraction than in other markets (globally, 26% of online shoppers look outside their home countries for electronics). Electronics was the second-ranked product category for cross-border shopping globally, whereas in Canada it was ranked fifth.
Free shipping is a much bigger motivator for Canadians, with 62% saying they would be more likely to shop cross-border if they didn’t have to pay for shipping, compared to just 47% globally. More surprising is that Canadian shoppers believe free shipping is even more important when shopping domestically – 54% said free shipping was a “must-have” for domestic online shopping, compared to 48% who said it was a “must-have” for shopping internationally.
“Even domestically, shipping is something that has higher costs here in Canada, and Canadians are looking for ways to save on those costs,” said Reynolds.
She added that as some domestic retailers like Lowe’s and Lululemon have rolled out free shipping, shoppers may have come to expect it.
Paypal estimates that Canadians will spend roughly $30 million on online retail this year, up 15% from 2013, and $4M on mobile retail, up 37% from 2013.
