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Omnichannel report: Finding growth in reinvented retail

29/06/2018

Omnichannel report: Finding growth in reinvented retail
  • E-commerce, cash and carry and discounters gain market share globally

  • Hypermarkets and supermarkets still the most important FMCG channels

 

Kantar Worldpanel, the global expert in shoppers’ behaviour, recently launched 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 & Supermarket

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%

Source: Kantar Worldpanel
 

Stéphane Roger, Global Shopper and Retail Director, Kantar Worldpanel, said: “The global FMCG market is harder than ever 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 & Middle East

+8.8%

Asia

+4.3%

Latin America

+7.3%

USA

+0.5%

Western Europe

+2.2%

Source: Kantar Worldpanel, Europanel


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 & Middle East

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

Get in touch

Des Deocareza
New Business Development Head

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