People’s shopping habits are changing with the times.
In 2014, 1.32 billion people were digital shoppers who purchased goods and services online. This year, in 2021, the number has jumped to 2.14 billion and is expected to climb further due to the COVID‑19 pandemic.
In a world where consumers are increasingly choosing to shop online, Canadian small businesses who want to excel should, and need to, expand internationally to reach new markets and consumers. Small businesses that strictly remain in their local community, or even province or country, are only limiting their potential market.
Below are five reasons why Canadian small businesses should consider expanding their operations internationally.
By staying in a domestic market, Canadian small businesses are losing out on potential customers, revenue and sales – and even placing themselves at risk. Small businesses that export are more diversified and less dependant on a single market, reducing their business risk and reaching new customers across the world.
“While Canada is a good market for new businesses, it’s limited, and SMEs that export their goods and services to foreign markets can outperform their peers — data has shown that their revenues are higher, they grow faster and they reinvest more than SMEs who focus solely on the domestic market,” said Eric Bosco, Mitacs’s Chief Business Development and Partnerships Officer.
By diversifying their market, small businesses engage in a risk-reduction strategy that involves garnering new customers and revenue along the way.
The Canadian “brand” advantage
Earlier this year, Canada was ranked the best country in the world according to the 2021 Best Countries Report from US News & World Report.
To many international countries, Canada is an appealing and reputable country. Many foreign buyers see a product made in Canada or from Canada as a big buying feature, allowing Canadian small businesses to use this as a competitive advantage.
The Canadian brand advantage sets even the smallest Canadian businesses apart from their international competitors just by that aspect alone. Having the Canadian brand seal also allows businesses to market their products as high-quality, innovative, trustworthy and reputable.
Canada’s global trade network
International business can sometimes be difficult with unavoidable factors that come into play like duties, taxes, custom fees and border restrictions.
Fortunately for Canadian small businesses, Canada has a broad and growing global trade network that gives them preferred access to seize opportunities on a global scale, including networks with tariff-free countries.
With 14 free trade agreements and partnerships with 51 countries, 36 foreign investment promotion and protection agreements (FIPAs) and many more negotiations in progress globally, Canada is the most connected G7 country in the world.
These agreements allow Canadian small businesses to use Canada’s trade network to their advantage. With preferential access to over 1.4 billion potential customers in 50 countries around the world, Canada’s small businesses have a competitive edge over those in other countries.
Saturation of digital technologies available
The booming growth and saturation of technology, e-commerce and digital marketing have made the barriers to expanding a business internationally less challenging.
The predominantly digital world that we live in allows small businesses to expand their operations at a low cost without high fixed investments. Essentials like a website, e-commerce system and digital marketing platform have made reaching out to and connecting with international customers easier and more cost-effective. Thanks to today’s technologies, small businesses can use platforms like Shopify, Wix, Squarespace and even social media to sell to and reach international consumers.
Increased ability to compete domestically
Staying exclusively in a market filled with local competitors doesn’t allow businesses to grow to their potential or gain a better understanding how to evolve and persevere with new challenges.
Using the experience and knowledge gained from competing in a global market allows small businesses to apply what they’ve learned to their domestic market, finding innovative and better ways to compete and thrive in their own market at home.
By catering to an overseas market, small businesses gain a competitive advantage from the experience of selling in a less saturated market filled with fewer, or perhaps even none of their local competitors.
Small businesses that take the next step and expand internationally will be the ones thriving and leading over the next few years – not only internationally, but in their own domestic market, too.
Interested in learning more about how to expand internationally? University Canada West’s Online E-Commerce Micro-Credential by the Digital Marketing Institute is tailor-made for those who are eager to upskill for an evolving digital world.
The course is bursting with the latest industry insights, expert-driven case studies and best practices, quick reads, webinars, presentations, downloadable tools and much more.
To learn more, visit ucanwest.ca/micro-credentials.Published on Dec. 17, 2021.