E-Commerce Creating Opportunities for Small Business Growth
Insight The digital revolution is transforming the way business is done across Canada.
For the small businesses that take advantage of digital tools and e-commerce solutions, that can mean tremendous growth potential. “The internet and mobile technology are creating opportunities for every small business to accelerate growth, access new markets, and reach new audiences,” said Paul Parisi, President of PayPal Canada.
But despite the immense opportunity presented by e-commerce technology, only one in five Canadian small to medium-sized businesses (SMBs) currently sell online.
To gain a deeper understanding of the power that digital tools can have on small business growth, PayPal analysed a sample of 4,000 small businesses that use its online tools. The report exposed three key benefits of digital tool adoption: revenue growth, access to global markets, and building local economies.
Digital tools have a big impact on small business growth
Selling online offers businesses enhanced strategic advantages, such as the ability to access shoppers where they are, find operational efficiencies, and sell goods and services with ease around the world. PayPal’s insights show that businesses that leveraged e-commerce tools grew faster than those that did not. In 2017, SMBs that used PayPal grew 22 per cent year-over-year. Comparatively, Statistics Canada reported that in 2016, non-financial industries grew less than one percent year-over-year.
E-commerce tools are also helping Canadian SMBs export to more than 80 countries around the world, including Australia, China, Japan, and the U.K. “E-commerce tools are opening the doors to foreign markets for many small businesses which is critical for the health and vitality of the Canadian economy, right down to local communities,” said Parisi. More than 63 per cent of Canadian SMBs that use PayPal for payments export their products, versus about 12 per cent of traditional SMBs according to Statistics Canada.
In addition, e-commerce has given rise to a wave of entrepreneurship that isn’t just restricted to urban centres. “Our data shows that businesses across Canada from the non-urban and rural areas are taking advantage of digital commerce tools and technology to access larger audiences that urban-based businesses have been able to access through sheer proximity,” says Parisi. As a result, digital small businesses located in rural parts of Canada grew 18 per cent between 2016 and 2017 and suburban businesses grew at 46 per cent year-over-year.
In certain parts of Canada, some of these trends were even more pronounced. “We found that digital small businesses from Saskatchewan grew an astounding 55 per cent year-over-year in 2017 and those that exported grew even faster, at 61 percent,” said Parisi.
Explore how e-commerce can help your business grow
The bottom line is that a thriving e-commerce environment leads to greater trade, employment, and income opportunities. “By having more Canadian small businesses embrace digitization, we can create a more inclusive economy that benefits all businesses regardless of size," says Parisi.
For the past 10 years, PayPal has worked closely with its partners to create that same inclusive digital economy where all businesses can thrive. “Owning a business is hard enough, so arming your business with the right tools is one of the smartest things owners can do to position their business for growth,” says Parisi.
To learn more about how you can leverage PayPal’s digital tools and resources to position your business for growth, visit paypal.ca/smallbusiness.