Why do so many corporations use Canada as a test market?

Testing, Testing... Why do so many corporations use Canada as a test market?

As McDonald’s starts selling Beyond Meat sandwiches in Canada, we are reminded of all the ways that Canada, and in particular, markets like London Ontario, serves as a test market for global corporations. In recent years, Ikea’s pick-up warehouses, Lululemon’s loyalty program, Facebook Dating, Twitter modifications, and in the early 2000s, McDonald’s Chicken Nugget and Swiffer’s Wet Jet, have all been tested in Canada before being rolled out to other markets. Why do companies use Canada as a test market?

 

The first reason is that Canada has a good representation of customers around the world. Canada’s friendly immigration policies mean that 20% of Canadians were born in a foreign country, and 10% of Canadians are from Asia. At the same time, nearly 70% of Canadians live within 100 km of the US, which means Canada’s culture and consumption habits are quite similar to the world’s largest consumer market. Lastly, this concentration of Canadians means there are many high-density pockets, which makes it cost-effective to run test campaigns.

According to our data, 44% of London Ontario’s labour force are blue collar workers. In the Greater Toronto Area, 48% of residents were born outside of Canada. These demographics make Canadian cities the perfect place to serve as test markets.



https://www.theglobeandmail.com/report-on-business/small-business/sb-managing/london-test-market/article26846284/

https://www.bbc.com/news/world-us-canada-48071932

https://www.bloomberg.com/news/articles/2020-01-30/does-mcdonald-s-sell-beyond-meat-why-canadians-get-first-taste

https://digiday.com/marketing/planning-international-expansion-dtc-brands-use-canada-testing-ground/