Thank you very much, Mr. Chair.
Good afternoon. It's a pleasure to be here. My name is Shannon Glenn, and I am assistant vice-president of government relations at the Business Development Bank of Canada, or BDC.
I'd like to start with a brief overview of the bank, after which I'll address the subject of the committee's study.
We are the only bank dedicated exclusively to entrepreneurs, and we are a financially sustainable crown corporation that does not rely on Canadian taxpayers. We work closely with 50,000 entrepreneurs operating in a range of sectors across the Canadian economy, and we provide support in the forms of loans, investments, and advice. We do not provide grants or subsidies; rather, we operate on commercial terms and support creditworthy businesses for viable projects.
E-commerce is one of the most powerful digital technologies and is transforming the economy by creating new online markets. In fact, we have recently released a study on emerging trends shaping the Canadian business landscape. Our study highlighted the rise of e-commerce as an important trend.
The growth of e-commerce presents an excellent opportunity for Canadian companies to access a new world of competition. For many businesses, using technology to connect and engage with customers is no longer optional. The reality is that Internet and mobile devices are transforming the way consumers search for new products, get recommendations, interact with companies, and make payments.
Our chief economist, Pierre Cléroux, is projecting that retail e-commerce sales will double to $56 billion by 2020, in large part from consumers living in an increasingly hyperconnected, high-speed world. Consequently, this means that any small shop can actually become a micromultinational, if you will, as low-cost e-commerce apps now allow any small enterprise to sell worldwide.
These findings are consistent with a growth strategy recommended in a 2015 BDC study, which explored the challenges faced by SMEs and recommended implementing an e-commerce strategy to target new markets and take opportunities previously only available to larger companies.
I'd like to take a moment to share a story about a company called From Rachel, which is a Montreal-based business founded by Carolyne Parent, Alyeska Guillaud, and Mélanie Heyberger in 2014. They provide an online subscription service offering great-looking, high-quality stockings to women who sign up to receive stockings every two, three, or more months.
Despite what seemed like a good idea, they experienced slow sales growth. To address this, they changed strategies. They conducted surveys and focus groups to identify how From Rachel could improve its customer experience. They realized they were sending out the same style of stockings each time, and that women actually wanted recommendations and a selection personalized to their tastes and needs. This proved to be a major turning point.
They developed an online questionnaire to identify customer preferences, and sales took off. Since then, they've quadrupled their sales each year. They have been featured on the French version of Dragons' Den and are now exploring plans to expand into the U.S.
This example demonstrates that e-commerce presents new opportunities for small companies to access international markets far more easily and cheaply than ever before.
However, these advantages are accompanied by some unique challenges. Consumers are approaching companies armed with more information than ever before, as the borderless nature of e-commerce is increasing the speed and intensity of competition. Also, with less than one-quarter of businesses with fewer than 20 employees currently using e-commerce platforms, our small enterprises have some catching up to do when it comes to digital technology adoption.
For these reasons, we have focused on building capacity through advice for our clients. We have a number of recommendations, which I can review in questions.
To conclude, we want more companies like From Rachel and we stand ready to support them to achieve their goals. Through its offerings, BDC continues to increase support for smaller firms in becoming more competitive globally, encouraging them to pursue digital technology adoption so that they can capitalize on the opportunities that e-commerce presents.
Thank you very much for taking the time. I'm happy to take questions.