Electronic commerce: Household shopping on the Internet

An estimated 2.2 million households spent almost $2 billion shopping on the Internet in 2001, according to the electronic commerce component of the Household Internet Use Survey (HIUS). These households placed 13.4 million orders over the Internet from various locations.

This level of electronic commerce was up substantially from the year before, although direct comparisons with 2000 data cannot be made. This is because the 2001 electronic commerce component of the HIUS was redesigned to be able to capture Internet shopping from households that regularly used the Internet from various locations, solely for household purposes. In previous years, household electronic commerce data were collected only if the Internet shopping was conducted from home. This survey improvement constitutes a break in the data series, preventing a direct comparison of results of 2001 with those of previous years.

In 2000, an estimated 1.5 million households spent about $1.1 billion, placing 9.1 million orders from home.

From January to December 2001, an estimated 4 million households, about one-third of all households in Canada, had at least one member that used the Internet to support purchasing decisions, either by window shopping or placing online orders.

Just over 57% of these 4 million households made a commitment to order, and in four out of five cases paid for items over the Internet.

Canadians are increasingly using the Internet as a method to order

The value of orders placed over the Internet constituted a small fraction of the $621 billion in total personal expenditure in Canada in 2001. However, the new data confirm that households increasingly used the Internet as a method of purchasing products from both Canadian and foreign vendors.

For every $10 spent by households on electronic commerce in 2001, $6.50 was spent on purchases directly from Canadian sites. Canadians spent $680 million, or about 35% of their electronic commerce dollars, at non-Canadian Web sites.

Survey estimates released in The Daily on July 25 showed that 7.2 million households, or about 60% of all Canadian households, regularly use the Internet from various access points such as home, work, school, public libraries and other locations.

About 1.7 million households, or 14% of the total, window-shopped in 2001 - that is, they used the Internet to narrow their purchasing decisions, but did not commit to ordering or purchasing online.

In 2001, 784,000 households used the Internet for the first time to order products, bringing the total number of electronic commerce households to 2.2 million. Almost one-fifth of households placed an order over the Internet from various locations for personal or household consumption.

Households that ordered products or services online in 2001 placed an average of 5.9 orders from any location; the average value of each order was $148.

About 16% of electronic commerce households used the Internet to make travel arrangements. Households also used the Internet to order tickets to concerts, ballet, sporting events or movies.

Households were much less likely to commit to orders for bedroom suites or appliances, but as window shoppers, they used the Internet as a method of comparison-shopping. More than one-quarter of window-shopper households browsed for furniture and appliances.

Households in British Columbia spent more online

Households in British Columbia had the highest average expenditure on the Internet in 2001, and those in Quebec had the lowest. This reflects the fact that British Columbia has one of the highest adoption rates for Internet use and that Quebec has one of the lowest.

Households in British Columbia that ordered products online from any location reported an average annual expenditure of $1,394. The national average for households that ordered products was $880.

Ontario remained the largest market for electronic commerce spending for personal or household expenditure. In 2001, Ontario households from various locations purchased $828 million in goods and services over the Internet, accounting for 42% of the $2 billion total.

Electronic commerce households in Atlantic Canada had the highest average number of orders per household at 6.9 in 2001, above the national average of 5.9.

More households order online despite security concerns

More households opted to order products electronically than in previous years, despite the fact that concern about security and privacy remained relatively unchanged, according to the survey.

Households that only window-shopped and did not order over the Internet were the most concerned about the security of online financial transactions, with about 80% of window-shoppers expressing concern.

About 72% of households that made payments online opted to ignore their concern and use their credit card online anyway.

Information on methods and data quality available in the Integrated Meta Data Base: survey number 4432.

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

The public-use microdata file for the 2001 HIUS conducted in January 2002, and a revised file for 1998 will be available in October. The survey provides information on the use of the Internet by Canadian households within the 10 provinces. This is the fifth cross-sectional microdata file to be released in the series beginning with the 1997 HIUS.

The Household Internet Use Survey public-use microdata file on CD-ROM (56M0002XCB, $2,000) will be available in October.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Jonathan Ellison (613-951-5882; fax: 613-951-9920; jonathan.ellison@statcan.gc.ca), Science, Innovation, and Electronic Information Division.