Joining the electronic marketplace

In 1997, Dell Computers became the first-ever online store with annual sales of over a million dollars. Over the next two decades, online shopping has made e-commerce an everyday experience for millions of consumers. Its growth has been explosive: as shown below, global retail sales for 2017 are estimated at well over $US2 trillion. This represents an overall growth, since 2012, of 123 per cent.

As the table below shows, online retail sales are growing more quickly in some regions than in others. The Asia-Pacific region is growing fastest of all, with India in the lead.

What’s behind this explosive growth? On the consumer end, one factor is the growing number of internet users, especially in emerging markets; India, for example, is adding millions of subscribers every year. On the sales side, perhaps the biggest contributor to the increase is that e-commerce technology now has the power to turn even small and medium-sized businesses into companies with a worldwide reach. Equipped with easy-to-use electronic storefronts and other inexpensive online platforms, even pocket-sized companies can now sell to the very same customers as companies a hundred times their size.

The growth of the business-to-business (B2B) e-commerce market is showing an even sharper upswing. By 2020, the worldwide B2B e-commerce market is estimated to be twice the size of the consumer market and will be worth as much as US$6.7 trillion.

International e-commerce, in short, is levelling the playing field in ways that may have far-reaching consequences for many Canadian companies—even those that are not (yet) doing business overseas.

“E-commerce has been a game changer for us,” says Josh Fine, who is Partner-VP Brand and Distribution for Winnipeg-based Manitobah Mukluks. “What it’s allowed us to do is compete against multibillion-dollar companies. We can’t possibly spend what they spend on marketing, but with e-commerce, we can spend 10 cents on an ad, and we get a click and then we’ve got a transaction. It allows us to scale our business in a way that was never before possible. And for our foreign markets, our online sales have become our number-one export channel."