As if figuring how to position your company to take advantage of e-commerce opportunities wasn’t enough of a strain on the brain, the latest cyberspace stats have thrown a paradox into the mix. Despite all the hype about the Internet economy, the number of businesses selling online is actually going down, the latest Statistics Canada report on e-commerce indicates. Yet sales over the Internet are going up, particularly for the transportation and warehousing industries, and the online footprint continues to grow at an impressive pace.

The total value of private sector sales over the Internet, with or without online payment, rose dramatically in 2000, while the proportion of businesses selling online fell, Statistics Canada’s Survey of Electronic Commerce and Technology, 2000 found. The sample size for the national survey was about 21,000 businesses.

Canadian businesses received $7.2 billion in customer orders over the Internet in 2000, up 73.4 percent from $4.2 billion in 1999. However, only six percent of businesses reported selling goods and services on-line in 2000, down from 10 percent in 1999. These six percent of businesses selling online accounted for one-quarter of all gross business income.

Among the businesses that responded to the survey in both 1999 and 2000, for every two that started selling over the Internet in 2000, five stopped doing so.

Despite the substantial advance in revenues generated through the Internet, e-commerce sales still accounted for only 0.4 percent of total operating revenue in 2000, up slightly from 0.2 percent in 1999. Internet sales enjoyed their second-highest share in the transportation and warehousing sector where they accounted for 1.5 percent of sales.

Measured by value, e-commerce sales were highest in manufacturing, followed by wholesale trade, transportation and warehousing, and retail trade.

Large businesses were more likely to be selling over the Internet. In 2000, 31 percent of business enterprises with more than 500 employees sold goods or services over the Internet. In contrast, only six percent of businesses with 1 to 19 employees sold online.

The percentage of Canadian businesses purchasing goods or services over the Internet was higher in 2000, with 18 percent buying goods or services over the Internet, which is up from the 14 percent posted in 1999, according to Statistics Canada’s survey.

While the survey focused on Internet-based transactions, businesses can also sell or purchase goods over non-Internet proprietary EDI networks. Overall, 10 percent of enterprises used non-Internet EDI in 2000. The use of non-Internet EDI networks was highest in private sector health care services (23 percent), finance and insurance (18 percent), utilities (17 percent), wholesale trade (14 percent) and manufacturing (14 percent).

Perhaps more impressive than the growth in online procurement is the growth of the online footprint. The survey found that 63 percent of businesses used the Internet in 2000, up from 53 percent in 1999. Thirty-nine percent of private sector employees had Internet access in 2000.

Of the businesses that used the Internet in 2000, 43 percent did so to access databases of suppliers, 23 percent did so for education and training, and 16 percent did so to access databases of customers.

The Internet continued to play an important role in communications. In 2000, 60 percent of private sector enterprises had e-mail, compared with 53 percent in 1999.

Besides e-mail, 12 percent of enterprises had an Intranet, an internal company communications network using the same protocol as the Internet, enabling communication within an organization. A smaller proportion, four percent, had an Extranet, a secure extension of an Intranet that allows external users to access parts of an organization’s Intranet. In addition, a higher proportion of enterprises had a Website in 2000: 25 percent of enterprises had a Website, up from 22 percent in 1999.