Online GMV grows 110%, Canada may usher in a shopping boom

Canada's online sales increased 110% year-on-year in January

The ongoing pandemic has prompted Canada’s retail sales to fall for the second consecutive month in January, down 1.1% month-over-month to $52.5 billion, as many regions of Canada have required physical stores to close. In contrast, Canada’s e-commerce sales in January increased 110% year-over-year to $3.5 billion. In fact, the continued surge in e-commerce coincides with the significant increase in physical store closures at the beginning of the year.

In the data of Canada's retail decline, we can see that the biggest drop is in clothing and accessories stores, where sales fell by 17.8%, which is the fourth consecutive month of decline in this category. In addition, sporting goods, books, music stores and furniture stores also showed a significant downward trend. This can also be reversed to show that when Canadians cannot buy such products offline, they will buy them online.

Among them, stores selling grocery products that are daily necessities for consumers saw a 3.3% sales increase in January, and stores selling building materials and gardening equipment saw a 2.9% sales increase. It seems that there is a reason why the home improvement category has been popular from 2020 to 2021. The explosion of this category is not only related to Americans, but also to Canadians.

Canadian consumer spending may grow 5% annually

In fact, at the end of 2020, the Canadian government maintained strict restrictions on public areas, which prompted more and more consumers to choose online shopping. However, credit and debit card consumption data showed that as various regions in Canada gradually lifted lockdown restrictions in January, consumer spending rebounded strongly.

In terms of personal categories, as stores open, shoppers flock to retailers selling furniture, electronics, appliances, and household goods such as garden and building equipment. Given the circumstances, the home improvement category is likely to continue to be hot for some time.

In addition, as the pandemic has prompted Canadians to accumulate up to $200 billion in excess savings, relevant sources said that if Canadian households use 10% of their excess savings for consumption purposes, consumer spending could grow by 5% per year in 2021 and beyond, which is likely to prompt a shopping spree in Canada. To a greater extent, it could boost Canada's economic recovery.

Currently, Canada is facing a series of problems such as the second wave of the COVID-19 pandemic and the slow pace of vaccination. We still don’t know the future opening and development of offline stores. However, with the increase in COVID-19 cases and the increasingly stringent blockades and restrictions in Canada, it is an indisputable fact that more consumers choose to shop online.

Consumer spending

Online GMV

Canada