Canadian Small Biz Developing an Internet Economy

Canadian small business bought and sold approximately $670 million in goods and services over the Internet in 1999, and will do significantly more in 2000, according to a survey by SES Canada Research.

The SES Web Entrepreneurship Survey of 1,000 Canadian small businesses found that Canadian entrepreneurs made purchases worth $430 million over the Internet in 1999. They sold $230 million worth of goods and services over the Internet in 1999. The survey also found that 44 percent of small businesses plan to engage in electronic commerce by the end of 2000, compared to 27 percent that had engaged in e-commerce as of Spring 1999.

“In the grand scheme of things, the small business e-commerce market remains a small but dynamic component of the Canadian economy,” said Nik Nanos, Managing Director of SES. “Most small business decision-makers have not used the Internet to buy or sell anything, and among those who have engaged in e-commerce, the dollar value of the transactions remains relatively low. However, we are seeing more and more small businesses getting into e-commerce and the size of the transactions is growing.”

The survey found the average amount purchased by Canadian small businesses over the Internet in 1999 was $1,900; and the average amount sold by Canadian small businesses over the Internet in 1999 was $3,700.

“While the amounts are relatively small — both in total sales and purchases, and the numbers of businesses involved — they represent a significant and growing market,” Nanos said. “As both the number of e-commerce companies and the size of their transactions grow, the importance of this market to Canada’s economy will quickly increase. For example, if those with plans to engage in e-commerce over the next year do so, and there is a commensurate increase in the average size of transactions, the market could approach $1 billion by the end of 2000.”

The SES survey also found there has been a 13 percent increase in the number of Canadian small businesses using the Internet since Spring of 1999, bringing the total to 74 percent. The number of Canadian small businesses people who have bought or sold goods or services over the Internet has increased 8 percent to 35 percent since Spring of 1999.

Canadian small businesses still use the Internet primarily as a communications and research tool:

  • 66 percent of all small businesses say they currently use email (up from 57 percent in Spring 1999)
  • 50 percent of all small businesses have used the Web for business research (up from 38 percent since Spring 1999)
  • 41 percent of small businesses maintain a Web site for external communications (up from 37 percent since Spring 1999)

The SES Web Entrepreneurship Survey is a syndicated survey on electronic commerce, focusing specifically on business with fewer than 50 employees. Conducted every six months, it identifies opportunities and assists subscribers in understanding the perceptions of small businesses as they relate to commercialization of the Internet. SES surveyed by telephone 1,000 randomly selected Canadian small businesses between Oct. 26 and Nov. 12, 1999.

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