Amazon.ca launches consumer electronics online shop

Amazon.ca on Friday widened its inventory to include electronics in a bid to lure consumers frustrated with big-box stores and busy malls.

The company, which has long been selling electronics through its website in the U.S., faces considerable competition from Best Buy, Wal-Mart and the Source — retailers already well-established in the Canadian market.

But unlike other retailers struggling with the wobbly economy, Amazon has performed strongly, earning $118 million US in the third quarter. Revenue for the third quarter was $4.26 billion, up notably compared with the $3.26 billion in sales Amazon posted during the same time frame in 2007.

Kaan Yigit, president of Solutions Research Group, said he expects Amazon's entry will have a minor impact on the big-box stores.

"This said, this is a good move for Amazon — I think they will do well with smaller-ticket digital lifestyle items in particular," he said in an e-mail. "The majority of the bigger-ticket items will likely still go through brick-and-mortar stores.

But, he noted, expanding beyond books might allow Amazon.com to surpass Chapters.ca in terms of carrying a wider range of products.

Amazon.ca's decision to launch in Canada comes as the economy is forcing many consumers to scale back their spending habits. Consumer Lana Paine said the extra expenses that come with new technology are considerable.

"You know, I was getting away with $18.99 basic cable for years and years, and now it's $60-something just to make my cable TV work," she said of her new flat-screen television.

Elena Jara, a Toronto-based credit counsellor, said consumers should be careful with their money and luxuries.

"You have to be careful as to what you can really afford," she said. "Is it a need or is it a want?"