Canadian E-Commerce Spending Grows By 20 Percent, Reports Comscore Networks

Comscore Analysis Reveals that Canadian Internet Users are Shifting Their Buying from International to Domestic Online Merchants

Toronto, Ont., May 11, 2004 – Comscore Networks today released an analysis of online buying by Canadian residents, which revealed that their e-commerce spending has grown significantly in the past year. The research found that spending by Canadians at more than 200 of the largest e-commerce sites in Canada and other countries increased by 20 percent during the fourth quarter of 2003 compared to the prior year.

When examining the type of product or service purchased online, Comscore found that the growth in e-commerce was primarily the result of an increase in online travel spending, which grew by more than 50 percent -- in line with the growth rate observed by Comscore in the United States. In Q4 2003, online travel spending by Canadian residents accounted for 46 percent of the country’s total consumer e-commerce sales (excluding auctions), which mirrors a similar proportion observed in the U.S., where travel spending accounted for 44 percent of all online sales.

In contrast to their increased travel spending, Canadians’ overall non-travel spending remained relatively flat versus year ago. However, despite this aggregate trend, Comscore did find growth among many individual sites. In fact, approximately 60 percent of the 100 largest non-travel sites in Q4 2003 succeeded in growing their sales among Canadian residents by more than 20 percent over Q4 2002.

“With 52 percent of the total population already online, it’s surprising that Canadians aren’t spending more online on non-travel products,” said Brent Lowe-Bernie, president of Comscore MMX Canada. “However, sales growth at many of the largest e-commerce sites clearly indicates that merchants with the right strategy and offerings can benefit from Canadian consumers’ willingness to buy online.”

“While Canadian e-commerce isn’t growing with the same intensity as it is in the U.S., clearly some online marketers have been able to successfully develop their Canadian online business,” said Geoff Ramsey, CEO of eMarketer. “This should serve as an example to others that Canada can indeed play an important role in the growth of e-commerce.”

“The impressive growth in the online travel category is a clear validation that travel and e-commerce are truly a hand-in-glove fit for Canadians,” said Sean Shannon, managing director of Expedia Canada. “Canadians clearly understand the benefits of being presented with a wide range of travel information and purchasing options at easy-to-use sites like Expedia.ca.”

Canadian Sites Are Taking a Larger Piece of the Pie
In addition to increased spending levels, the Comscore analysis found that Canadians’ online buying is shifting from non-Canadian sites to Canadian sites. Both domestically owned properties, such as WestJet.ca, AirCanada.ca and Indigo.ca, as well as Canadian subsidiary sites based in Canada, such as Expedia.ca and Staples.ca, are benefiting from this trend.

“Marketers that haven’t yet established a presence in Canada should take note of this shift,” continued Mr. Lowe-Bernie, “which suggests an increasing preference toward buying at domestically-based sites.”

“We’re pleased to see that panel-based e-commerce metrics are now available for the Canadian market,” said Robert Pearson, divisional merchandising manager of e-commerce for Best Buy Canada. “Over the past year, at FUTURESHOP.ca, we saw traffic increase by 50 percent, but more importantly, our sales more than doubled. We continue to believe that Canada represents a strong growth market for online merchants with the right e-commerce strategy.”

“The shift from non-Canadian to Canadian online merchants follows a trend Comscore has observed in a number of other countries,” said Gian Fulgoni, chairman of Comscore Networks. “As spending in less developed e-commerce markets moves toward critical mass, online buying migrates from international sites to domestically-based merchants.”

Traditional “Early Adopters” Leading the Charge
A demographic analysis of online buyers revealed that cohorts traditionally found to be early adopters of new behaviors and technologies are exhibiting the largest increases in e-commerce spending. Online spending by 18 to 34 year olds, long sought after by marketers for their current and future discretionary spending and influence over other age groups, has jumped by more than 44 percent versus year-ago levels. Spending by broadband users, who account for 60 percent of all online sales, grew by 24 percent from Q4 2002 to Q4 2003.

About Comscore Networks
Comscore Networks provides unparalleled insight into consumer behavior. This capability is based on a representative cross-section of more than 1.5 million global Internet users who have given Comscore explicit permission to confidentially capture their Web-wide browsing, buying and other transaction behavior, including offline purchasing. Through its patent-pending technology, Comscore measures what matters across the entire spectrum of surfing and buying behavior. This deep knowledge of customers and competitors helps clients design more powerful marketing strategies and tactics that deliver superior ROI. Comscore services are used by global leaders such as Microsoft, The Newspaper Association of America, Knight Ridder Digital, Best Buy, Verizon, Nestlé, Wells Fargo & Company, GlaxoSmithKline, and Orbitz. For more information, please visit www.comscore.com.

Press
Bill Daddi
Daddi Brand Communications
646-370-1341
press@comscore.com