Inside Logistics

SMEs that use e-commerce grow faster, study shows

New PayPal Canada data reveals e-commerce boosts international trade opportunities for Canadian SMBs

October 4, 2018

TORONTO – Canadian small- and medium-sized businesses leveraging e-commerce are growing significantly faster than their offline counterparts, according to new data from PayPal.

Small businesses that sell online through PayPal grew 22 per cent year-over-year in 2017, in sharp contrast to offline small businesses, which saw less than one per cent growth year-over-year in 2016.

PayPal Canada analyzed online transaction data from 4,000 Canadian small businesses that use its platform. The insights reveal that international trade opportunities previously pursued mainly by bigger retailers are now much more accessible to small businesses through e-commerce.

The data show that small businesses in the country are now targeting foreign markets. Nearly 30 per cent of digital small businesses that export goods and services do so to three countries or more.

“In today’s competitive world, small businesses need access to digital tools that open them up to global audiences,” says Paul Parisi, president of PayPal Canada.

“With a deep dive into our data it’s heartening to see that our small business customers are digitizing their businesses to grow and sell internationally. For Canada to be a more vibrant and inclusive economy, we need the vast majority of small businesses to embrace digital commerce capabilities because that’s where the world is shifting.”

Exporting results in greater growth
The accessibility of e-commerce solutions enables small businesses to access foreign markets and trade opportunities. These export opportunities are global, as e-commerce allows Canadian businesses to diversify trade partners outside of the United States and Mexico.

PayPal’s new proprietary data shows:

  • More than 63 per cent of digital small businesses export their goods and services. In 2014, about 12 per cent of Canadian SMBs engaged in international trade.
  • Digital small businesses that exported their goods and services experienced three per cent more growth between 2016 and 2017 than non-exporting digital small businesses.
  • Nearly 30 per cent of exporting digital small businesses sell to three countries or more.
  • The United States and Mexico are two of the top ten trade corridors for Canadians businesses. In addition, businesses that use PayPal are exporting beyond North America and selling into China, Australia, Japan and the UK, among over 80 other international markets.