E-Commerce Growth Slowing in Canada as Shoppers Look to Overseas E-Stores

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E-commerce growth slowing in Canada: analyst

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TORONTO, Cananda - E-commerce growth is slowing in Canada after "dropping dramatically" earlier this year, says one industry analyst, who notes Canadians have become increasingly wise to how much better online shopping can be in other countries.

According to MasterCard Advisors, monthly Canadian e-commerce sales have grown on a year-over-year basis for 55 consecutive months, but the trend began losing steam earlier this year.

A streak of more than 15 months of year-over-year growth exceeding 20 per cent was broken in the spring when online sales in Canada began slumping, said Sarah Quinlan, a senior vice president with MasterCard Advisors.

There are economic factors at play that slowed down online shopping in Canada but a nagging detriment to the e-commerce market is a relative lack of options consumers have at their disposal, especially in comparison to what's available in the U.S., U.K., and European countries.

While many of Canada's biggest retailers host robust e-commerce platforms, there are some glaring omissions.

When Target made its big launch into Canada in March it didn't include an online store and the U.S. retailer has given no indication when it may enable online shopping. Canadian Tire only sells tires online and although it plans to enact a wider e-commerce strategy next year, it will focus on letting consumers ship purchases to their nearest store, not to their home.

"One of the biggest challenges right now is there aren't as many (e-commerce) options," said Quinlan, who noted that consumers aren't blind to the fact that there are often better deals and more selection available if they do some cross-border online shopping, even after factoring in the exchange rate, duties and shipping.

Canadian shoppers who visit the websites of U.S. retailers including J.C. Penney, Macy's and Nordstrom are greeted by pop-up windows that promise an easy transaction with all the extra fees tallied at check out and no surprise costs.

"It's very critical to give respect to the consumer, the consumer is extremely aware. You can see it in the overall volatility of total retail sales ... you can absolutely see the consumer is very sensitive to any change in overall policy that might affect their purchasing power or their wallet," said Quinlan.

In September, Google commissioned Ipsos to conduct an online poll to gauge consumer intentions heading into the holiday season. …