By Gail Balfour

AMAZON SPENT MORE THAN A YEAR PREPARING ITS .CA LAUNCH ONLY TO have it greeted by grumbles from homegrown companies and some sectors of the Canadian government. Despite that, many industry watchers believe the new offering will prove to be the saviour of Canadian e-tailing.

David Ticoll, in fact, called Amazon.ca “the second coming” of Canadian ecommerce.

“Canada has been an odd market for online retail. It’s only been in the past year that we’ve seen any significant signs of life.And now, oddly enough, it’s Amazon that’s likely going to legitimize this market,” said Ticoll, the chief innovation officer for Toronto-based Digital4Sight. “It is going to drive online retail in Canada in ways that probably should have happened years ago.”

Canada has always been a solid Amazon market, even before the .ca launch, according to Marven Krug, general manager for Amazon.ca. More than 250,000 Canadians made purchases at Amazon.com in the last year, making Canada the company’s largest export market, he said.

“We knew the interest was there because we get an awful lot of visitors from Canada. And we also knew that they were visiting us heavily, but not buying as heavily. I think [the main reason] people prefer to shop locally is because the product is shipped locally, not because the owner of the company has a particular passport.”

Local playing field
In order to comply with federal regulations, which disallow foreign companies from setting up shop in Canada, Amazon.ca is based in the U.S. but uses Canadian partners Canada Post and its Assured Logistics subsidiary to handle the delivery and
fulfillment aspects of its operation.

The deal means customers can order books, movies and other merchandise from the company, pay in Canadian funds and have their purchases shipped domestically. That cuts both delivery costs and waiting times. But critics feel the American company will be stepping on the toes of established domestic online retailers such as Chapters/Indigo.

Krug disagrees. “If someone is our direct competitor then we compete on a level playing field and the customers choose the best option for them. “Businesses [in Canada] have not been delivering a satisfying e-commerce experience. You can be as Canadian as you want, but if you are not delivering a satisfying shopping experience, the customer will see no reason to return.”

In fact, once you remove the prohibitive cost of cross-border shipping and U.S. currency conversion, then “a book is a book is a book,” said Mark Quigley, research director with the Kanata, Ont.-based Yankee Group, Canada.“At the end of the day, price becomes one of the main reasons a person would shop in one place over another.

“Look at what Amazon has done and look at the graveyard it has emerged from. Most of its peers are dead. It’s certainly a company that has shown it knows how to properly do this.”

Ticoll feels Amazon’s .ca launch may just be the shot in the arm e-commerce in Canada needs. “There’s been a lot of press
that Canadian bookstores will be hurt by this . . . [but] this a knowledge economy.

If Canada is going to continue on its upward path and become increasingly competitive with the U.S., we need better, faster and cheaper access to knowledge and resources.”

Boon or bust?
At Amazon.ca’s June launch, Jeff Bezos, Amazon.com founder and CEO, insisted the new Web site, which carries about 1.5
million items, is a boon to Canadian authors and publishers, especially those who are lesser known.

“The structure of what we do turns out to disproportionately benefit the small publisher and the small author,” he said.

“The reason is very simple—we carry 10 times the selection. And because we don’t have the shelf space constraints that a physical store has, we don’t have to make the hard business trade-offs on which products to carry.

“[When you list a million books] someone is the one-millionth bestseller.

And believe me, the way traditional retailers handle [these] works, they don’t get a lot of shelf space. In fact, they get zero,” he said.

Jack Livesley, a Toronto-based author, welcomes the launch and said any online presence is good.

“I’m all for any source, either for research or for [showcasing] our stories,” he said. “Getting your stuff online so people can comment on it [is positive] and I’m all for anything that helps the printed word.”

However Peter de Jager, a Brampton, Ont.-based author, consultant and speaker, is not so quick to praise Amazon.ca’s efforts.

“Take those same Canadian authors and represent them on Amazon.com [instead] and they will have the best of the world,” he said. “The Internet is non-geographical, and when organizations try to pretend they somehow put a Canadian spin on it,well it’s just so phoney to create illusionary boundaries on something that has its value based on the fact that it doesn’t have any boundaries.”

Although de Jager thinks offering products domestically and in Canadian dollars is a good idea, he said the argument that this will boost Canadian culture “just doesn’t make any sense to me.”


W e b b o o k s
Amazon Canada http://www.amazon.ca
Assured Logistics http://www.assuredlogistics.com
Canada Post http://www.canadapost.ca
Digital4Sight http://www.digital4sight.com
Yankee Group http://www.yankeegroup.com