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E-commerce, cash and carry and discounters gain share



Discover global FMCG and retail trends, and how brands can drive growth through different channels.

Discover global FMCG and retail trends, and how brands can drive growth through different channels.

Kantar Worldpanel, the global expert in shoppers’ behaviour, today launches its latest retail report “Winning Omnichannel: Finding growth in reinvented retail”. The publication reveals that in 2017, 76% of fast-moving consumer goods (FMCG) value growth came from channels outside supermarkets and hypermarkets. The three fastest growing channels globally are e-commerce (+15%), discounters (+5.2%) and cash-and-carry (+4.4%). These channels outperform hypermarkets and supermarkets, which continue being by far the bigger channels, but growing globally at slower pace (+0.8%).

Kantar Worldpanel forecasts that by 2020, 15.3% of FMCG products will be sold by the three fastest growing channels – e-commerce, discounters and cash and carry. E-commerce will be the fastest raising channel in 2020 representing 7.2% of the global market share boosted by increased internet penetration from markets such as Africa and Asia.

Table 1: Global FMCG value share by channel

  2015      2016      2017      Forecast 2020
Hypermarket &
50.8% 49.8% 49.2% 48.4%
Discounters 5.1% 5.2% 5.3% 6.0%
Convenience 5.4% 5.5% 5.5% 5.8%
E-commerce 4.8% 5.4% 5.8% 7.2%
Traditional trade 18.5% 18.6% 18.4% 18.4%
Cash-and-carry 1.3% 1.6% 1.8% 2.1%
Others 14.1% 13.9% 14% 12.1%

Stéphane Roger, Global Shopper and Retail Director, Kantar Worldpanel, said: “The global FMCG market is harder than even growing only a+1.9% in value last year while gross domestic product (GDP) experienced an almost +4% growth. Beyond the average, growth is fragmented because of booming e-commerce and discounters, and struggling hypermarkets and supermarkets. Shoppers are giving a clear message: they want convenience and value for money. At Kantar Worldpanel we predict that spending in supermarkets and hypermarkets will decline to 48.4% in 2020. Successful strategies need better understanding of the new channel dynamics at play and the differences between countries.”

The FMCG global market evolution
The FMCG market globally grew 1.9% in 2017. Less mature markets such as Africa, Latin America and Asia are the ones growing at the fastest rate (+8.8%, 7.3% and 4.3% respectively). In contrast, the market grew at 2.2% in Western Europe (influenced by inflation in the UK in the Brexit context) and US, the biggest contributor to FMCG spend in the world, saw almost flat growth (+0.5%). Demand is declining for three key reasons: population growth is slowing, people are generally trading down on their FMCG spend either by buying less or choosing private label, and they are also shopping less frequently.

Table 2: FMCG annual value growth in 2017

  2017 growth
Global +1.9%
Africa +8.8%
Asia +4.3%
Latin America +7.3%
USA +0.5%
Western Europe +2.2%

Adapting the retail strategy to shoppers 
Brands that adapt their retail strategy to the expected evolution of channels in each region will have more possibilities to succeed. E-commerce continues to grow fast in Asia, which already has a 7.3% market share. The discounters are strongest in Europe, particularly Eastern Europe, where they hold 27.4% of FMCG sales, and in parts of Latin America such as Colombia (21%) and Mexico (18.8%). In contrast, in markets like Brazil modern trade remains relatively underdeveloped and cash-and-carry is growing fast, now representing 10.6% of sales.

Table 3: FMCG value share by channel (2017)

  Modern trade[i] Traditional and others[ii] E-commerce
Global 61.8% 31.8% 5.8%
Africa 76% 24% -
Asia 51.8% 40.9% 7.3%
Latin America 55% 44.9% 0.1%
USA 88.2% 9.9% 1.9%
Western Europe 85.6% 8.8% 5.6%

Source: Kantar Worldpanel, Europanel

[i] Modern trade includes: hypermarket and supermarket, convenience stores and discounters

[ii] Other include: door to door, drugstore, and pharmacy

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David Berry

Managing Director, Ireland


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