12 August, 2015

Online Sales Of FMCG To Hit $US130 Billion In A Decade: Report

By B&T Magazine

FMCG sales grew 28 per cent last year and are on track to reach $US130 billion in value by 2025 according to new data released by the Kantar World Panel. China is the fastest growing market for online FMCG, however the UK consumers are the most frequent purchasers.

According to Stéphane Roger the global shopper and retail director at Kantro World Panel, “The report is based on in-depth analysis of the purchasing habits of 100,000 shoppers in 10 of the biggest online FMCG markets”

He says retailers and brands need to prioritise their e-commerce strategies to take advantage of the real opportunities that e-commerce brings.

The report called “Accelerating the growth of e-commerce in FMCG, 2015 Edition” notes that online currently represents a small proportion (less than four per cent ) of the worldwide FMCG market, the channel grew almost 30 per cent in 2014 alone. “This growth is most evident in the world’s most advanced e-commerce markets. In the UK, for instance, online grew its share from five to six per cent.”

In his blog Roger writes, “FMCG e-commerce grew at a faster pace in Asia with China being the fastest growing market (up 34 per cent) followed by South Korea (up 22 per cent). In Europe the FMCG ecommerce grew 20 per cent in the UK and 12 per cent in France. South Korea continues to be the country where FMCG online sales are higher reaching 13.2 per cent of the total FMCG market (compared to 10.2 per cent one year ago).”

Roger argues that with only a quarter of shoppers buying online on a global level, there is enormous headroom for growth. “South Korea is a great example of e-commerce potential becoming reality: 58.9 per cent per of South Korean households buy FMCG products online at least once a year. In the UK, France and Spain, nearly one out of four households buy online but the UK supermarkets are trailblazing in building repetition.”

The report also examines the opportuities and advantages for brands from ecommerce.

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According to the studies authors, “The advantages of e-commerce for brands are myriad. Some have set up their own e-stores or more commonly have stores on e-commerce platforms such as Amazon and Alibaba, allowing them to shift higher volumes of goods at attractive prices.”

For example they say for brands such as Procter & Gamble’s Pampers, the task is to ensure the economies of scale in selling high volumes at low prices at pgshop.com or via the brand’s Amazon e-store, are greater than those achievable by selling lower volumes at similarly low prices in bricks-and-mortar retailers.

“Kantar Worldpanel data shows clear differences in terms of performance by type of category, including those catering for young families, bulky items and products at the luxury end of the
spectrum,” notes the report.

This article originally appeared at www.which-50.com

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