Canadian Small Businesses Increase E-Commerce

The number of Canadian small businesses connecting to the Internet seems to have leveled off, a survey by SES Research found, but online businesses are buying and selling more online than ever before.

The SES Web Entrepreneurship Survey of 1,000 Canadian small businesses found more than three-quarters (76 percent) of Canadian small businesses are connected to the Internet, approximately the same percentage as in Spring 2000 (74 percent). The number of small business decision makers who bought or sold something online between fall 1999 and fall 2000 also remained flat at 40 percent.

But the value of the e-commerce transactions conducted by Canadian small businesses has seen a significant jump. Small businesses in Canada bought approximately $720 million and sold approximately $590 online during the 12-month period from fall 1999 to fall 2000 for a total of $1.3 billion in e-commerce transactions during that period. This represents an increase of $540 million in e-commerce transactions during the period from spring 1999 to spring 2000.

“The bursting of the dot-com bubble has hit Canada’s entrepreneurs,” said Nik Nanos, managing director of SES. “Their expectations of the Internet are lower and they are not rushing to get online like they were. However, those who are online are conducting more and larger transactions and increasingly incorporating the Internet into their businesses. There is less sizzle but there is more steak than ever.”

Despite the rapid growth in e-commerce, the most popular uses of the Internet among Canadian entrepreneurs remain communications and research. Almost all (97 percent) of small business Internet users and 74 percent all small businesses use email, according to the survey. Nearly three-quarters (73 percent) of small business Internet users use the Internet for conducting research, and more than half (51 percent) of all small businesses operate a Web site to promote their business.

“Communcations and research are still the Internet’s killer apps,” Nanos said. “Entrepreneurs start by using it for communicating and gathering information and, as they become more comfortable with the technology, they graduate to buying and selling online. Small business owners adopt the Internet in a tiered and strategic fashion.”

The SES Web Entrepreneurship Survey was conducted among 1,000 randomly selected small businesses from Dec. 7 to Dec. 15, 2000.