Pandemic fast-tracked digital transformation for Canadian small businesses
TORONTO — A new study by PayPal Canada, Business of Change: PayPal Canada Small Business Study, shows how dramatically the pandemic has accelerated digital commerce for Canadian small businesses.
Two in three small businesses (67 per cent) accept payments online and half (47per cent) of them only started doing so this year. Of all small businesses selling online, one third (34 per cent) turned to digital payments only after Covid-19 was declared a global pandemic in March.
Canadian businesses have lagged behind their US and global counterparts in embracing digital commerce in previous years, but this study revealed a positive shift. The number of Canadian small businesses selling online spiked nearly 400 per cent in the last five years with the global pandemic being a major catalyst for merchants going digital.
The majority of online small business owners (72 per cent) believe e-commerce is now necessary in order to have a successful business. In fact, 69 per cent of online small business owners said selling online has made them more successful.
“The shift in small businesses embracing digital tools, technologies and sales channels has been phenomenal. This year, we’ve seen more movement on Canada becoming a digital economy than in the last five years,” said Nicole Watts, head of Government Relations for PayPal Canada. “Digital commerce is no longer a luxury, it’s a necessity to survive given our new norm and changing consumer behaviour. In addition to these survey results, at PayPal, we have witnessed a three-fold increase in businesses across Canada signing up for our products and services.”
Impact of Covid-19 on Canadian Small Businesses
Being online was a matter of survival for Canadian entrepreneurs. Without the ability to sell online, 58 per cent of small business owners said they don’t think their business could survive the impact of Covid-19.
While being online has certainly made running a business during a pandemic easier, the coronavirus has had a deep impact on the bottom line. More than half of small businesses have been negatively impacted by the pandemic (55 per cent) and one in four business owners say they are not confident they can sustain themselves over the next six months (26 per cent).
However, there were also positive outcomes for entrepreneurs. The vast majority of small businesses (84 per cent) are doing some type of preparation for future waves of Covid-19 and 64 per cent say the pandemic has motivated them to consider new ways to grow their business.
Other survey highlights include:
- 59 per cent of small businesses say preventing fraud is a challenge of selling online
Reaching customers in the US was seen as a top-five benefit of e-commerce;
- 53 per cent say they are hopeful that the holiday season will make up for some of the losses their business has faced earlier this year;
- Compared to all Canadian small businesses, those that are online only tend to be owned by women (53 per cent), millennials (47 per cent) and from the BIPOC community (45 per cent); and
- Compared to all Canadian small businesses, offline businesses have a greater proportion of boomers (26 per cent) and a lower representation of BIPOC ownership (31 per cent).