FMCG online sales to reach $130 billion by 2025
A report published today by Kantar Worldpanel reveals the true potential for the worldwide FMCG e-commerce market. “Accelerating the growth of e-commerce. 2015 Edition” forecasts FMCG online sales will hit $130 billion by the end of 2025. 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 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 ecommerce 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 ecommerce strategies to take advantage of the real opportunities that e-commerce brings:
Huge promise: With only 1 in 4 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 4 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 spends 66 USD per trip online compared to the 16 USD spent per trip in a brick and mortar store, four times more.
Loyalty: the online share of wallet is already high. In China, online shoppers spend more for buying diapers (+34% ),infant milk powder (+21%) and pet food (+19%).
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.”
Jason Yu, General Manager of Kantar Worldpanel China, comments: “The e-commerce channel is providing FMCG players with genuine growth opportunity at a time when overall market demand weakened in recent years. Our research shows that consumers in China, motivated by product choices, convenience and price, are increasingly embracing the channel for their everyday grocery. The appeal is widening, as e-commerce retailers rapidly expand their presence deeper into lower tier cities. With more investments into distribution network and cold chain delivery as well as the promotion of cross-border e-commerce by the government, the growth look set to continue well into the 2020s.
FMCG online sales will hit $130 billion by the end of 2025
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