Loonie driving U.S. shoppers to Canadian websites

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While it is not unusual for American shoppers to shop across the border in times of the Loonie’s weakness, this slump has seen a vast increase in their doing so in the online arena.

Over the past two years, the Canadian dollar has fallen about 18 per cent against its U.S. counterpart. Correspondingly, PayPal spending by U.S. shoppers on Canadian websites jumped 20 per cent in 2015 from the previous year.

EMarketer suggests that this is unusual for American shoppers, who typically stray from international e-commerce—when these customers buy foreign products online, getting it delivered is considered importing and is thus subject to examination from U.S. Customs and Border Protection. This means that buyers may have to pay extra duties and fees depending on the item.

Regardless, many Americans still feel that this hassle is worth it—in 2015, Americans spent $3.2 billion on Canadian websites. According to a study from PayPal and Ipsos SA, this is part of a total cross-border spending spree of $27 billion that is expected to grow 10 percent in 2016.

A February report from eMarketer notes that the top two reasons that U.S. digital shoppers cited for buying cross-border were product availability and better prices. PayPal adds that the top three categories of goods purchased are auto parts, fashion, and Web services and software. CJ

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