Canadian Manufacturing

Pandemic fast-tracked digital transformation for Canadian small businesses: survey

1 in 4 businesses say they're not confident they can survive the next six months

November 16, 2020  by CM Staff

The Business of Change: PayPal Canada Small Business Study shows how dramatically the pandemic has impacted Canadian SMBs and how they plan to continue adapting. (CNW Group/PayPal Canada)

TORONTO — A new study by PayPal Canada, Business of Change: PayPal Canada Small Business Study, shows that the pandemic has accelerated digital commerce for Canadian small businesses.

Two in three small businesses (67%) accept payments online and half (47%) of them only started doing so this year. Of all small businesses selling online, one third (34%) turned to digital payments only after Covid-19 was declared a global pandemic in March.

Canadian businesses have lagged behind their U.S. 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.1

The majority of online small business owners (72%) 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.

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“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, in a prepared statement. “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.”

Being online was a matter of survival for Canadian entrepreneurs. Without the ability to sell online, 58% of small business owners said they don’t think their business could survive the impact of Covid-19.

More than half of small businesses have been negatively impacted by the pandemic (55%) and one in four business owners say they are not confident they can sustain themselves over the next six months (26%).