Bookselling giant Amazon has 35 times as much online market share as Canadian competitor Chapters Indigo, according to estimates from BMO Nesbitt Burns.
Amazon controls about seven per cent of the Canadian online retail market, mainly due to its core line of book products, BMO said in an analysis this week. Chapters Indigo controls 0.2 per cent of the online retail market.
The second-largest online retailer in Canada is Walmart, with about 1.5 per cent of market share.
While visits to the Amazon.ca website more than doubled in 2013, visits to Chapters Indigo’s site fell by 15 per cent, the analysis found.
In the offline world, Chapters Indigo controls about half of Canadian book sales. The company has been struggling under the same pressures facing all physical bookstores in the age of digital retail, and has been closing stores. But its latest earnings report shows a bounce-back, with revenue up 5.4 per cent in the quarter ending in June.
The BMO report also indicates Canada is well behind much of the developed world when it comes to online retail. And it suggests Amazon could become an even larger player in Canada.
“If Amazon.ca were to achieve the same share of retail sales in Canada as Amazon.com and Amazon.co.uk have achieved in the U.S. and the U.K., respectively, then Amazon.ca’s revenues could triple or quadruple from current levels,” BMO analysts wrote.
In all, online sales account for 4.4 per cent of all retail sales in Canada, BMO wrote (about $21.6 billion of $483 billion in total sales last year).
In the U.S., online sales account for some 5.8 per cent of retail sales, while in the U.K. it’s 11.6 per cent, BMO said, citing research from eMarketer.
Despite the slow rollout of online retail, Canadian chains are taking notice of Amazon’s presence.
Loblaws, which last year announced it’s buying Shoppers Drug Mart, is launching a “click and collect” grocery service that allows shoppers to purchase online and pick up their goods by car.
Analysts saw that move as being at least partly a response to Amazon’s launch of an online grocery store in Canada.
BMO noted that Amazon has launched more than a dozen new “stores” in Canada over the past year. Besides groceries, the site now has a pet store, an automotive store and a toys and games store, among others.
High shipping costs have long been considered one of the main reasons online retail has been slow to take off in Canada. BMO says Amazon has addressed that problem through its Amazon Prime service, which guarantees two-day service at discounted rates for an annual fee of $79.
“By eliminating shipping costs for individual, low-priced items, we believe Prime membership encourages consumers to make more frequent purchases from the website,” the analysis stated.
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Amazon controls about seven per cent of the Canadian online retail market, mainly due to its core line of book products, BMO said in an analysis this week. Chapters Indigo controls 0.2 per cent of the online retail market.
The second-largest online retailer in Canada is Walmart, with about 1.5 per cent of market share.
While visits to the Amazon.ca website more than doubled in 2013, visits to Chapters Indigo’s site fell by 15 per cent, the analysis found.
In the offline world, Chapters Indigo controls about half of Canadian book sales. The company has been struggling under the same pressures facing all physical bookstores in the age of digital retail, and has been closing stores. But its latest earnings report shows a bounce-back, with revenue up 5.4 per cent in the quarter ending in June.
The BMO report also indicates Canada is well behind much of the developed world when it comes to online retail. And it suggests Amazon could become an even larger player in Canada.
“If Amazon.ca were to achieve the same share of retail sales in Canada as Amazon.com and Amazon.co.uk have achieved in the U.S. and the U.K., respectively, then Amazon.ca’s revenues could triple or quadruple from current levels,” BMO analysts wrote.
In all, online sales account for 4.4 per cent of all retail sales in Canada, BMO wrote (about $21.6 billion of $483 billion in total sales last year).
In the U.S., online sales account for some 5.8 per cent of retail sales, while in the U.K. it’s 11.6 per cent, BMO said, citing research from eMarketer.
Despite the slow rollout of online retail, Canadian chains are taking notice of Amazon’s presence.
Loblaws, which last year announced it’s buying Shoppers Drug Mart, is launching a “click and collect” grocery service that allows shoppers to purchase online and pick up their goods by car.
Analysts saw that move as being at least partly a response to Amazon’s launch of an online grocery store in Canada.
BMO noted that Amazon has launched more than a dozen new “stores” in Canada over the past year. Besides groceries, the site now has a pet store, an automotive store and a toys and games store, among others.
High shipping costs have long been considered one of the main reasons online retail has been slow to take off in Canada. BMO says Amazon has addressed that problem through its Amazon Prime service, which guarantees two-day service at discounted rates for an annual fee of $79.
“By eliminating shipping costs for individual, low-priced items, we believe Prime membership encourages consumers to make more frequent purchases from the website,” the analysis stated.
Also on HuffPost: