A report published by Kantar Worldpanel – “Accelerating the growth of e-commerce: 2015 Edition” – forecasts FMCG online sales to hit $130 billion by the end of 2025, revealing the true potential for the worldwide FMCG e-commerce market.
Online’s share of FMCG purchasing in advanced e-commerce markets will double in the next 10 years and Kantar Worldpanel estimates online purchasing will reach 30% in South Korea, 15% in China and at least 10% in the UK and France.
Global FMCG online sales grew 28% in 2014
With growth of 28% globally in 2014 alone, sales online are rising, particularly in the world’s most advanced e-commerce markets.
FMCG e-commerce grew at a faster pace in Asia with China being the fastest growing market (+34%) followed by South Korea (+22%). In Europe the FMCG ecommerce grew 20% in the UK and 12% in France. South Korea continues to be the country where FMCG online sales are higher reaching 13.2% of the total FMCG market (compared to 10.2% one year ago).
Opportunities for retailers and brands
The report is based on in-depth analysis of the purchasing habits of 100,000 shoppers in ten of the biggest online FMCG markets and identifies the need for retailers and brands to prioritise their e-commerce strategies to take advantage of the real opportunities that e-commerce brings:
Huge promise: with only one in four 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% 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.
Valuable shopper profile: the typical profile is a family with young children, urban-suburban, middle/upper class. An average online shopper in the UK, for example, spends £43 (66 USD) per trip online compared to the £10 (16 USD) spent per trip in a bricks-and-mortar store, over four times more.
Loyalty: the online share of wallet is already high. Online shoppers in the UK spend 23% of their annual FMCG spend in the same retailer.
Stéphane Roger, Global Shopper and Retail Director at Kantar Worldpanel, explains:
“Since last year’s ‘Accelerating the Growth of E-commerce in FMCG’ report, we have seen major changes in the structure of many retailers and brands. Mondelez, Walmart, Pepsico, Coca-Cola, Procter & Gamble and Unilever have each implemented plans to future-proof their business for e-commerce. It seems that for these global leaders, the talk is fast turning in to action.
Roger stresses that joining the e-commerce race is a matter of urgency: “Simply put: the market is remarkably unkind to latecomers. Winning among the retailers are those which first invested. Tesco in the UK and France’s E.Leclerc both enjoy an online market share double that of their offline counterparts. For brands, the urgency lies in getting on shopping list. Our data shows that 55% of online shoppers use the same shopping list from one purchase to the next, giving first movers a big advantage.”
Source: Kantar Worldpanel