Online sales still mostly off

For the London Free Press – June 9, 2008

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New figures released by Statistics Canada reveal a lack of response from public- and private-sector enterprises to the increasing demands for electronic commerce and technology.

The figures in the 2007 Survey of Electronic Commerce and Technology — available online at statscan.ca — show online sales have increased while the proportion of enterprises that sell goods and services online has remained relatively stable. In 2007, online sales by both the private and public sector increased by 26 per cent from the previous year, totalling an estimated $62.7 billion.

Though there has been an increase in online internet sales for six consecutive years, only 16 per cent of public-sector organizations and eight per cent of private-sector companies sold goods and services online in 2007.

While those numbers seem high, online sales made up an insignificant percentage of the total operating revenue in the private sector. Online sales accounted for only two per cent of total operating revenue in the private sector, up one percentage point from 2002.

Private- and public-sector enterprises are themselves participating in online transactions, but as consumers — not providers. According to the 2007 figures, public- and private-sector enterprises were more likely to buy goods or services online than they were to sell them online.

In 2007, 48 per cent of private-sector enterprises and 82 per cent of public-sector enterprises reported using the Internet to buy goods or services. In the same year, only eight per cent of the private-sector enterprises and 16 per cent of the public-sector enterprises reported using the Internet to sell online.

This trend has changed very little over the last four years, despite the continued growth in online sales. The most significant change has been in the percentage of public-sector enterprises, using the Internet to buy goods or services online, up 14 per cent from 2003.

One should not conclude from these figures that information and communications technologies are not popular among the public or private sector. In fact, most of the private sector reported using e-mail (81 per cent), wireless communications (77 per cent) and the Internet (87 per cent). Additionally, all public-sector enterprises surveyed reported using e-mail and the Internet (100 per cent) and nearly all — 91 per cent — reported using wireless communications.

It’s noteworthy that though more than three-quarters of the private-sector enterprises reported using some sort of information and communications technologies, less than half of them reported having a website (41 per cent). In contrast, 93 per cent of the public-sector enterprises reported having a website.

Essentially, private-sector enterprises are making use of information and communications technologies but not using them as much to facilitate online sales or to provide information about themselves and their products online.

This trend is surprising when only 10 per cent of the private-sector enterprises reported they perceived no benefits to doing business over the Internet. The most common perceived benefits by private-sector enterprises were lower costs (30 per cent), reaching new customers (36 per cent), and better co-ordination with suppliers, customers or partners (36 per cent).

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