What I've seen is that american brands have had trouble penetrating that market because preference goes to the incumbent local company.
There's a certain amount of truth there. But there are also counter-examples. Walmart, in particular, destroyed quite a bit of the competition (Woolco, K-Mart, Zellers, etc).
And then there's cross-border shopping...
Target is struggling to gain acceptance
Well, not anymore. The best I can determine is that Target's approach to the Canadian market was to push brand recognition, but their supply chain, pricing, and how they ran their stores was jarringly different from how they ran them in the US, and enough Canadians knew the difference that once the word got out, the impression was they were trying to milk Canadians without bringing anything new to the table.
Canadian Tire is still the go-to
Canadian Tire hits a real sweet spot in terms of locations, pricing and selection. I can't really think of any other competition which covers quite the same ground.
even major e-tailers like Newegg have trouble over the other Canadian e-tailers
True. I think ncix.com was solidly established well before Newegg opened a Canadian store.
The problem for these companies is that their .ca sites routinely offer less to Canadians at usually substantially higher prices than their .com's, and while there may be legit business reasons, nobody likes being treated as a second-class citizen. So there's always a bit of resentment.
Hell, Sears seems to have won mindshare by having a little maple leaf in their Canadian logo.
I think Sears won mindshare in Canada from catalog sales. There are Sears mail-order outlets in every stinking little town across the country, and Canada has a lot of stinking little towns; up until maybe 10-15 years ago when e-commerce took off they were the household name for remote purchasing. But they're no longer the only game in town, and their supply chain is still stuck in the 90's; I can buy Craftsman parts directly from China faster and more reliably than I can get them from the local Sears parts store. I'd be very surprised to see them last another five years.