The Daily. Tuesday, October 23, 2001

E-commerce: Household shopping on the Internet

Canadians more than doubled their purchases of goods and services on-line from home in 2000, according to the second annual snapshot of household electronic commerce activity from the Household Internet Use Survey.

From January to December 2000, an estimated 1.5 million households placed 9.1 million orders over the Internet, spending an estimated $1.1 billion.

This compares with spending of about $417 million for 3.3 million orders placed by an estimated 806,000 households during the previous survey period from December 1998 to November 1999.

Despite the substantial increase in household e-commerce, the value of orders placed over the Internet constituted a fraction of the $591 billion in total personal expenditure in Canada in 2000.

Of every $7 of e-commerce spending on goods and services in 2000, $4 was purchased directly from Canadian sites.

In all, 2.6 million households used the Internet to support purchasing decisions either by window shopping or placing an order on-line.

Shift in use of the Internet

Data show that households shifted their use of the Internet from a research tool for honing purchasing decisions to a means for household members to make an on-line purchase. In 1999, "window-shopper households" comprised the majority of Internet shoppers; the situation was reversed in 2000, when "e-commerce households" were the majority.

Note to readers Data for this report came from the 2000 Household Internet Use Survey (HIUS), from which estimates for Internet use were released on July 26. This HIUS was administered to a sub-sample of the households included in the Labour Force Survey. Excluded from the survey's coverage are residents of the Yukon, Northwest Territories and Nunavut, persons living on Indian reserves, full-time members of the Canadian Armed Forces and inmates of institutions. In 2000, 42,619 households were eligible for the HIUS. Interviews were completed for 33,832 of these households, for a response rate of 79%. Results were weighted to the entire count of households, excluding those listed above. This is the fourth year that Statistics Canada has conducted the HIUS, and the second year in which electronic commerce questions were asked. The data in this release reflect e-commerce from households that typically accessed the Internet from home, solely for household purposes. Unlike the Labour Force Survey, where information is collected on each eligible household member individually, the HIUS collected information on the household as a whole. A designated member of the household enumerated the on-line orders made by all members of the household in the previous 12 months.

About 12.3% of the nation's estimated 11.8 million households placed an order over the Internet at home from January to December 2000, becoming e-commerce households.

An additional 9.6% of households, or about 1.1 million, were window-shoppers. That is, they used the Internet to narrow their purchasing decisions, but did not commit to ordering or purchasing on-line.

Households that bought products or services on-line in 2000 placed an average of 6.2 orders, up from 4.1 orders in 1999. The average value of each order remained was unchanged at $121.

The strong advance in orders placed over the Internet occurred as the proportion of households regularly using it from home increased from 29% of all households in 1999 to 40% in 2000.

The popularity of products purchased on-line changed between the two periods. For instance, household members were much more likely to purchase clothing and less likely to purchase software or music.

In 2000, 17% of e-commerce households ordered clothing, jewelry, and accessories on-line, compared with 12% the year before. Computer software was purchased by  16% of members of e-commerce households in 2000, down from 25% in 1999. Similarly music was purchased by 15% of households in 2000, compared with 19% in 1999.

While e-commerce households were less likely to order certain commodities, the absolute number of households purchasing these commodities has grown with the strong advance in the number of e-commerce households.

Ontario households accounted for almost one-half of purchases

Households in the more populated provinces, with higher Internet usage rates, were the heaviest users of e-commerce from home.

For example, Ontario e-commerce households spent an estimated $529 million on-line in 2000, almost one-half of the national total. They spent an average of about $833 each, and placed an average of 6.4 orders.

Alberta followed with $160 million in household e-commerce, British Columbia at $145 million and Quebec at $144 million.

Each Alberta e-commerce household spent $973 on average, the highest of any province, and placed an average of 6.8 orders.

The biggest percentage gain in the value of e-commerce was in Quebec, where it rose by 278% to $144 million. This may have been the result of growth in Internet household penetration rates in Quebec, to 33% in 2000 from 21% in 1999.

Window-shoppers most concerned about security, privacy

Survey results showed that concerns about security and privacy might have played a role in both the frequency and intensity of household e-commerce.

Households that only window-shopped and did not order over the Internet expressed the highest level of concern about the security of on-line financial transactions. Window-shopper households continued to have the highest level of concern of the Internet shopper group. About 80% expressed some concern, compared with 75% of those that actually ordered or paid on-line.

Despite a greater number of e-commerce households and an increase in products ordered, respondents said that they were just as concerned for the security of financial transactions over the Internet as in previous years.

Additional data tables related to the information presented in this series are available on Statistics Canada's Web site (). From the Our products and services page, choose Free publications, then Communications, then Internet use in Canada, then Table of contents, then Tables.

For data or general information, or to enquire about the concepts, methods or data quality of this release, contact Jonathan Ellison (951-5882, jonathan.ellison@statcan.gc.ca), Science, Innovation and Electronic Information Division.