Yes, there are challenges involved in selling in Canada, but the rewards make it worth taking them on.
Canada is one of the Group of Seven (G7) most industrialized nations in the world and therefore an important import market, yet the list of retailers that have tried to expand into Canada and failed is long. The list includes such well-known names as Target, Marks & Spencer, Sony Stores, RadioShack, K-Mart, Big Lots, and Sam’s Club. So why do some of the world’s best retailers fail when they try to enter Canada?
The first mistake is to think that Canada is the same as the US or the UK – it’s not. For example, more so than in other countries, Canadians buy brands that they trust and matter to them; they are also particularly loyal. My company launched as the first marketplace in Canada – for Canadians, by Canadians – and has worked hard to build a strong and loyal relationship with consumers in Canada. When other companies enter the Canadian market in this way, they can leverage an already existing relationship with millions of Canadian consumers rather than trying to build a relationship from scratch, one Canadian consumer at a time.
It’s easy to underestimate how vast Canada is. Canada is about the same size as the United States and the United Kingdom combined, yet has fewer people than the state of California. This leads to many logistical challenges and costs in moving products around and getting products to the Canadian consumer. In many ways, online is a better way to reach them.
For foreign companies, Canada has a different currency, two different official languages, two different legal systems, a countrywide sales tax that combines in different ways with the various sales tax rates of the nine provinces and three territories.
The Canadian market does not have to be as treacherous to enter as other companies have found it if you partner with the right companies that are already working there.
This article was contributed by Rick Bélanger, a partner and senior vice president of business development at SHOP.CA.
All views and advice provided in this article are opinions of the author and not those of World First.