Kantar Worldpanel - www.kantarworldpanel.com

Global EC market grows 30% up to 4.6%

22/11/2017

Global e-commerce grocery market grows 30% up to 4.6% of FMCG E-commerce sales

Online FMCG sales reach 28% in Taiwan

  • E-commerce growth outpaces the overall FMCG market in the 12 months to March 2017
  • Online sales now contribute 36% of global grocery growth
  • In 2025 e-commerce will represent 10% of all FMCG spend
  • South Korea and China will continue to lead the way of FMCG E-commerce growth

 Sales of groceries through e-commerce platforms grew by 30% in the 12 months to March 2017, according to the report “The Future of E-commerce in FMCG” by Kantar Worldpanel, published today.

The study shows that e-commerce now accounts for 4.6% of all FMCG sales globally. Whilst the e-commerce channel is growing, the FMCG market as a whole is sluggish, increasing just 1.3% during the same period. E-commerce now contributes to a record 36% of global FMCG growth and will continue to outpace growth in offline FMCG retail. “Our projections show that in 2025, online FMCG will be a USD 170 billion-dollar business and hold a 10% market share” says Stéphane Roger, Global Shopper and Retail Director at Kantar Worldpanel.

Table 1
E-commerce % of FMCG online value share per markets (excluding fresh produce)

EC Value Share (%)

12 months to March 2016

12 months to March 2017

South Korea

14.1%

19.7%

UK

7.0%

7.5%

Mainland China

4.1%

6.2%

Taiwan

4.8%

5.8%

France

5.2%

5.6%

Spain

1.4%

1.8%

Portugal

0.9%

0.9%

Malaysia

0.4%

0.8%

Argentina

0.9%

0.8%

Thailand

0.4%

0.7%

Vietnam

0.3%

0.5%

Brazil

0.1%

0.1%


Brazil 0.1% 0.1% It is estimated that by 2025, online FMCG market will be a USD 1.2 billion-dollar business (NTD 38 billion) and hold a 10% market share (12 month 5.8% to March 2017). Though the FMCG market as a whole is sluggish, online shopping will be the momentum that drives the market upward.Kantar Worldpanel Insight Director Cathy Cheng points out that online FMCG sales grew 28% in Taiwan last year again, and the rapid growth continues especially in the past two years due to the 1111 Day activities that took place in China, the rising of cross-border e-commerce, and the entering of new platforms that stimulates Taiwan market. This provides more choices to the consumers as well as making e-commerce market become more active.

Global hotspots
In terms of absolute value growth, the top six contributors are all leading power economies, led by China and the US. The other top performing countries are South Korea, the UK, Japan and France. Last year, value increased by 52% in China, 41% in South Korea, 8% in the UK, 7% in France and 5% in Japan and in the US.

However, the online grocery sector is also expanding into new markets. There has been significant value growth, for example, in Thailand (+104%), Malaysia (+88%) and Vietnam (+69%) where e-commerce is in its early stages.

Europe

Europe remains a continent divided. With 5.6% value share in 2016, it is the second largest market in the world for e-commerce following Asia. However, while the UK and France remain on the front foot for e-commerce – with 7.5% and 5.6% market share respectively – Germany (1.7%) and the Netherlands (2.6%) are lagging behind.

Furthermore, there are signs that e-commerce is slowing down in Europe. Mature markets like France and the UK – while still evolving – are doing so at a slower rate. 

USA

Known for its attachment to large format hypermarkets, online grocery penetration has increased rapidly in the US in recent months, reaching 30% of the total population. Annual spending on food and alcohol through e-commerce is this year predicted to reach $20 billion. 

South America

There has been a slight increase in online grocery spend in Latin America over the past 12 months. The lack of trust in payment methods coupled with the overwhelming popularity of discount formats makes Latin America one of the most difficult regions for brands to succeed in the online world.

Throughout most of Latin America, e-commerce is lagging far behind traditional methods of shopping. The exception to this is Argentina, where e-commerce is exceeding usage compared to the rest of the region. 


2025 Forecast
Kantar Worldpanel projections show that by 2025, online FMCG will be a USD 170 billion-dollar business, and hold a 10% total market share.

South Korea and China will continue to lead the way and Asia in general remains at the cutting edge of online adoption. The big global uplift will come from the USA, predicted to rise from a 1.5% e-commerce share in 2017 to 8% in 2025. This can be attributed to the successful rollout of click and collect, delivery and subscription models, and the acceleration of disruptive models.

Table 2
E-commerce online value share forecast by 2025 per market

 

12 months to March 2017

2025

South Korea

19.7%

30%

Mainland China

6.2%

15%

UK

7.5%

12%

France

5.6%

11%

Taiwan

5.8%

10%

USA

1.5%

8%

Argentina

0.8%

5%

Brazil

0.1%

3%

Mexico

0.1%

3%


Other findings of the report include:

Megacities
Megacities have become natural breeding grounds for e-commerce. For example, in London, Beijing and Shanghai, e-commerce accounts for 10% of the FMCG market.   

Pure players vs. bricks and mortar retailers with online offer
“We know that e-commerce is still cannibalising offline purchases. However, there is growing evidence that online formats – in isolation – are no longer the best option for winning share.

 It´s about how online and offline work together to create a better shopper experience.” says Stéphane Roger.

Categories
Personal care and baby care products continue to dominate the online basket. Young and time-strapped families are increasingly seeking convenience when it comes to repeat purchases of everyday households’ essentials.

Focus on Amazon and Alibaba
The perception of E-commerce has changed dramatically after Amazon’s acquisition of Whole Foods and Alibaba’s alliance with Bailian Group. Amazon and Alibaba’s strategies compared and an Interview with Kurt Li, Head of business intelligence at Alibaba show some clues.

Mobile and Social Commerce
Today’s digitally adept consumers are always connected, browsing products on the move and comparing prices. It’s in this space that FMCG brands now need to position themselves.

Technology as a major accelerator
Advancements in technologies such as voice commerce and the Internet-of-things have enabled e-commerce to become a more streamlined and consumer-centric industry.

Global EC market  grows 30% up to 4.6%

Author

Cathy Cheng

Insights Director of Taiwan

 

+886 2 2570-0556 #314

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