CANADA; VIRTUAL MALLS OPEN SHOP : COLD CLIMATE ENCOURAGES COMPUTER USE

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[Toronto, Ontario] Canadians may be known for lagging behind their big southern neighbor in the latest developments. But with the "virtual mall," a hot new concept in cyberspace, Canada is only a step behind the U.S.

Similar to a real mall, cybermalls are a single location on the World Wide Web where shoppers can visit a wealth of shops with a few clicks of a button-and without the crowds. The concept has caught on in Canada (perhaps because of the cold, wintry climate which tends to keep shoppers at home), where about 20 virtual malls have sprung up recently.

One of the more advanced and comprehensive is "The Malls of Canada," located at http://www.

canadamalls.com. Boasting 110 storefronts and services, this virtual mall offers 40 categories of stores in sectors like autos, CDs and tapes, jewelry, lawyers and real estate. Most of the companies featured in this mall, as well as in others throughout Canada, are small and locally based-unlike in the U.S., where big brand-name marketers such as The Sharper Image, Eddie Bauer and J.C. Penney have opened Web stores.

"Cybermalls really haven't reached critical mass yet in Canada," said Derrick Cho, marketing manager-Internet services at the Toronto Globe & Mail. "It's a very localized, fledgling business here." Indeed, an ACNielsen report notes that only 11% of Internet users in Canada (23% of the population) have made an electronic purchase.

Setting up a virtual storefront is affordable. On the Malls of Canada, a site costs $320 a year, including page design.

Barring the occasional jumps and glitches common to all Web sites-some stores, when clicked, are listed as "Not Found"-the Malls of Canada site works reasonably well. With a click, a shopper can go directly to the home page of Maaco auto painting bodywork in Scarborough (a TorontVirtual malls open shopsuburb), order trading cards from Sluggers Sports Memorabilia or sell rare timepieces to Northern Time.

But does the Web work as an advertising medium? Opinions vary among these virtual mall merchants, which are as varied as CigarTrading, a mail-order shop that specializes in cigars from Portugal, Bar-B-Q Supply Etc., Inc. of Texas and FlowerLink, a floral delivery consortium of U.S. and Canadian florists. The Providers Limited in Toronto, which runs the Malls of Canada site and sells its ad space, declined to disclose ad revenue or usage for the Web site, which has been operating for two years.

For Carlos Diego, the owner of Sluggers Sports Memorabilia, the virtual mall has performed "well" for his store over the past year. "We get a lot of international orders," he noted.

Stephen Oltuski, president of vintage watch retailer Northern Time in Toronto, also said the Web is performing for him, albeit on a smaller scale. "It's a small percentage of my overall business, but when times are tough that makes a difference," he said. "From February of last year I've had almost 9,000 visitors to the site. My e-mail response varies from two to six e-mails a day. It's not bad."

He added, "It's the cheapest form of advertising that I've come across."

However, Eva Campbell, owner of a Maaco auto repair franchise in Scarborough, doesn't believe that the site set up for her has added much business (however, she opted not to have an e-mail address attached to her home page, as do Northern Time and Sluggers).

What the spot in the virtual mall does do for Ms. Campbell is generate positive promotion for the industry, which isn't exactly top-of-mind. With auto repair and auto body being a "really gray field," she said, "We wanted to throw a bit of light on the subject."

Contributing: Rebecca A. Fannin, New York

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