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Thursday, April 24, 2008
Online sales increased at a double-digit pace for the sixth consecutive year in 2007. Total private and public sector Internet sales hit an estimated $62.7 billion, up 26% from 2006.
Despite the continued strong growth, e-commerce still represents a relatively small fraction of total economic activity. In 2007, online sales of private sector firms accounted for just under 2% of total operating revenue, although this was still an increase from less than 1% five years earlier.
While online sales increased, the proportion of private sector companies that sold goods and services online remained stable at about 8%. In the public sector, some 16% of organizations reported e-commerce sales.
Private sector businesses dominated online sales in 2007. E-commerce by private sector firms increased 25% to $58.2 billion, while public sector e-commerce rose 30% to almost $4.5 billion.
Note to readers
The 2007 Survey of Electronic Commerce and Technology covered over 19,000 enterprises across the economy, except for local governments. The enterprise is the organizational unit of a business that directs and controls the resources relating to its domestic organization. Internet transactions that occur between two companies or establishments within the same enterprise are therefore excluded.
The sample was stratified at the two digit or sector level of the North American Industry Classification System (NAICS, 2007) and by employment size category. For analytical purposes, enterprises are classified as either private sector firms or public sector organizations.
Electronic commerce is defined as sales over the Internet, with or without online payment. Included is the value of orders received where the commitment to purchase is made via the Internet. Sales using electronic data interchange over proprietary networks and transactions conducted on automatic teller machines are excluded.
The value of financial instruments transacted on the Internet such as loans and stocks are not considered e-commerce sales, but the service charges received for conducting these transactions over the Internet are included.
CANSIM table 358-0010, "Enterprises that sell over the Internet," has been revised for 2006, based on more accurate information received for the 2007 reference year.
In the private sector, business-to-business sales accounted for 62% of online sales in 2007, down from 68% in 2006. The proportion of online business-to-consumer sales climbed from 32% to 38%.
It is estimated that customers outside Canada generated almost one out of every five dollars (19%) in online sales in the private sector, similar to the last two years.
Firms remained more likely in 2007 to purchase than to sell goods and services online, with just under one-half (48%) of private sector firms purchasing goods and services online compared with only 8% selling online.
The proportion of private sector firms purchasing goods and services online has been increasing steadily since this survey began, while the proportion of firms selling online has remained stable.
In 2007, an estimated 82% of public sector organizations made purchases online, compared with 16% who reported selling online.
|Selling or purchasing over the Internet|
|% of enterprises that use the Internet to sell or purchase|
|Sale of goods or services online|
|Purchase of goods or services online|
Public organizations in the education services sector reported the highest prevalence of online sales, at almost 39%. As well, just over one-quarter (27%) of firms in the information and cultural industries sector, and 24% of firms in the arts, entertainment and recreational industries sector sold goods or services online.
Four sectors continued to account for the majority of the value of online sales: wholesale trade (17%), transportation and warehousing (16%), manufacturing (15%) and retail trade (10%).
The proportion of online business-to-business sales and online business-to-consumer sales also varied by sector. Firms in the retail trade, accommodation and food services, educational services, and arts, entertainment and recreational sectors sold mainly to consumers.
Over three-quarters (77%) of private sector firms reported using wireless communications in 2007, up from 51% just seven years earlier, when this survey began.
Information and communications technologies commonly used in the private sector include Internet and e-mail. About 87% of private sector firms used the Internet in 2007, up slightly from 2006, while 81% used e-mail. However, less than half (41%) of private sector firms reported having a website.
Although a website facilitates online sales, it also supports off-line sales by providing information about goods and services. Information provision was the most common website function reported by private sector firms.
|Use of information and communications technologies (ICTs)|
|% of enterprises that reported using ICTs|
|Having a website|
In the private sector, over one-third (36%) of firms reported using Internet-based systems during 2007 to better coordinate with their suppliers and customers. Lowering costs and reaching new customers were also commonly reported benefits of conducting business over the Internet.
Better coordination was also most commonly reported by the public sector (59%). Almost one-half (48%) of public sector organizations also reported cost reduction as a potential benefit.
|Perceived benefits of enterprises conducting business over the Internet|
|% of enterprises reporting perceived benefits of conducting business over the Internet|
|Reaching new customers|
|Better coordination with suppliers, customers or partners|
|Reduced time to market|
"Open source" software is rising in popularity, according to survey data. Open source software is software for which the underlying source code is readily available for modification by any interested person or firm.
In 2007, an estimated 17% of private sector firms reported using open source software, up from about 10% just two years earlier, when this practice was first measured.
As in previous years, about one-half of organizations in the public sector reported using open source software in 2007.
An advantage of open source software is flexibility, allowing users to customize or modify the software to their specific needs. In 2007, 3% of private firms and 13% of public organizations reported customizing open source software.
Definitions, data sources and methods: survey number 4225.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Sylvain Ouellet (613-951-2779; email@example.com) or Mark Fakhri (613-951-6285; firstname.lastname@example.org), Science, Innovation and Electronic Information Division.