Online business trade in Canada will reach C$272 billion in 2005, representing 18% of all B2B transactions. According to a new Report from Forrester Research, Inc. (Nasdaq: FORR), C$272 billion of the total C$1.54 trillion in B2B trade conducted in Canada will be transacted online in 2005. On a provincial basis, Ontario and Quebec will emerge as online leaders.
“Although only 16% of Canadian companies have a clear B2B strategy, they will increasingly recognize the benefits of the Net and come to depend on it to plan, source, distribute, and sell product over the next five years,” said James Sharp, a Toronto-based analyst for Forrester. “Ontario and Quebec will take the lead in online business trade, accounting for C$193 billion of the total C$272 billion in 2005.”
In 2005, more than 92% of Canada’s online B2B trade will occur in four provinces: Ontario, Quebec, Alberta, and British Columbia. Second only to Michigan in North American automotive manufacturing, Ontario will see C$69 billion of motor vehicle trade shift online by 2005. Twenty-nine percent of Quebec’s total online B2B trade will flow through its computing and electronics supply chains. Alberta’s online petrochemical trade will hit C$23 billion by 2005, and rapid adoption of online B2B trade by electronics and automotive firms will account for 45% of British Columbia’s 2005 online B2B trade.
Canadian online business trade growth will vary across industries, dominated by automotive and petrochemicals. Due to tight links with the US auto industry, Canada’s automotive supply chain will sell C$91 billion online, with petrochemicals generating C$46 billion. By 2005, 40% of Canadian computing and electronics trade will go online, followed by maintenance, repair, and operations (MRO) supply chains, which will account for 24% of trade in paper and office products. Shipping and warehousing firms will help drive C$13 billion in online trade by 2005, while food and agriculture face slow adoption with only C$12 billion.
“By 2005, transacting business online will feel as natural as picking up the phone to call a supplier or hopping into a cab to visit a customer,” said Stuart D. Woodring, vice president, Research for Emerging Internet Economies at Forrester. “Astute Canadian executives will recognize the need for a scalable, nonstop eBusiness infrastructure, as well as the need to react to the unrelenting change pervasive in today’s dynamic Internet economy.”
For the Report “Canada’s B2B Future,” Forrester interviewed 50 Canadian executives about B2B eCommerce. Forrester also analyzed the 13 industrial supply chains that make up the overall Canadian B2B market, leveraging two key inputs: 1) industry revenue data from Statistics Canada for the years 1994 to 1999, and 2) industry-specific factors such as fragmentation, distribution intensity, and perishability.