Online sales growth tops 38% for 4th year in row Six times 2005 retail sales growth rate.

Online sales in Canada recorded their fourth consecutive year of strong double-digit growth in 2005, but e-commerce still accounted for just over 1 per cent of total operating revenues for private firms. Statistics Canada reports that combined online sales in the private and public sectors increased 38.4 per cent to $39.2 billion.

Online sales by private firms increased 37.2 per cent to $36.3 billion, while those by the public sector increased 55.4 per cent to $2.9 billion. This was the fourth straight year that the overall value of e-commerce sales in Canada increased by 38 per cent or more — six times the rate of increase in overall retail sales in Canada in 2005.

Internet searches remained the largest generator of revenues, accounting for $5.1 billion, or 41 per cent, of the 2005 figures — up from 39 per cent in 2004.

The robust growth in the value of online sales was in stark contrast to stagnation in the adoption of basic information and communication technologies.

In 2005, 82 per cent of all private firms used the Internet, unchanged from the previous year, and about 38 per cent had websites, up from 37 per cent. Statistics Canada said this stability suggests that these basic technologies have reached at least a temporary saturation point in the Canadian market.

In the United States, online ad revenues set a record of $12.5 billion (U.S.) last year, the Interactive Advertising Bureau reported yesterday. That's a 30 per cent increase from the previous high of $9.63 billion in 2004. Despite the record revenues, Internet advertising represents only 5 per cent of all advertising revenues in the United States, up slightly from the 4 per cent share in 2004, PricewaterhouseCoopers LLP said in the study it conducted for the bureau. Greg Stuart, chief executive of the Interactive Advertising Bureau, said he expects growth to continue as advertisers find additional ways to exploit broadband video, Internet-based TV and online games. Consumer-related ads accounted for half of last year's revenues. Financial services and computing made up about 12 per cent each.                             CP AP April 20 2006