Global Online FMCG Sales Grow by 13%

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Online sales of groceries grew by 13% globally in the 12 months ending June 2018 and now account for 6.3% of all fast-moving consumer goods (FMCG) sales worldwide, Kantar Worldpanel reveals. This compares with a 1.6% increase in total FMCG (online and offline) sales though it is the slowest e-commerce growth in five years.

The biggest contributors to FMCG e-commerce growth are China Mainland and the US, which both grew at 30% – in line with the average growth rate for global online FMCG sales over the past half decade. In terms of online share of total sales, Asian economies lead the way. South Korea tops of the table with an online value market share of 19.9% followed by China Mainland (9.5%), where access to rural areas is crucial in expanding e-commerce penetration. Taiwan (8.0%), Japan (7.6%), the UK (7.2%) and France (5.6%) follow.

FMCG value growth

Country

Total FMCG value growth (online and offline)

Online FMCG value growth

Global

1.6%

13.0%

China Mainland

4.5%

30.0%

US

0.5%

30.0%

Taiwan

3.7%

23.4%

South Korea

4.5%

20.0%

Spain

3.3%

11.7%

France

1.3%

6.5%

UK

3.4%

4.6%

Japan

-0.1%

1.2%

Source: Kantar Worldpanel, 12 months ending June 2018

Online FMCG value sales, % of total FMCG sales

E-Commerce Value Share (%)

12 m/e June 2017

12 m/e June 2018

Global

5.8%

6.3%

South Korea

16.6%

19.9%

China Mainland

7.3%

9.5%

Taiwan

6.5%

8.0%

Japan

7.6%

7.6%

UK

7.1%

7.2%

France

5.2%

5.6%

Spain

2.1%

2.3%

US

1.7%

2.2%

Portugal

1.5%

1.7%

Malaysia

1.0%

1.5%

Thailand

0.8%

1.2%

Vietnam

0.3%

1.2%

Argentina

0.7%

1.1%

Brazil

0.1%

0.1%

Source: Kantar Worldpanel, 12 months ending June 2018

Pure players beat traditional competitors to drive online growth
Online pure players like Amazon, Alibaba and JD.com are attracting new shoppers while traditional retailers are seeing a decline in online customers. In Asia, pure players have made significant steps in consolidating their market growth over the past year – in South Korea alone, pure players now account for 84.5% of the online FMCG market and are attracting three out of four online grocery shoppers.

Pure players vs traditional retailers
% value share of online

Value share (%)

Pure players

Traditional retailers

Global

58.3%

41.7%

South Korea

84.5%

15.5%

China Mainland

98.9%

1.1%

Taiwan

67.5%

32.5%

UK

16.0%

84.0%

Spain

21.0%

79.0%

Argentina

4.4%

95.6%

Source: Kantar Worldpanel, 12 months ending June 2018

Online purchase behaviour

Almost nine out of 10 Chinese shoppers prefer using their smartphone to make FMCG purchases online. This is in contrast to only 29% of British shoppers – almost half of the consumers in the UK use a laptop, similar to French and Spanish trends.

Eric Batty, global e-commerce business development director at Kantar Worldpanelsays: “The fact that 90% of Chinese consumers use their smartphones to buy online groceries is staggering and shows what can be achieved. European retailers and brands have a lot to learn – they have a huge opportunity to increase sales among a more dynamic and savvy audience who prefer to shop in this way. However, it’s crucial that they take a country-by-country approach to acknowledge the different devices, websites and apps which shoppers elect to use in different geographical markets.”

Fulfilment models

Online grocery home delivery has been adopted by almost all British and Chinese online shoppers but there is growth in France and Spain. Meanwhile, British consumers are increasingly moving to a new fulfilment model – subscriptions, which are used by 16.1% of the country’s online shoppers – representing an opportunity for the rest of Europe and in China Mainland.

Forecast

“Only a quarter of the world’s population currently shops for their groceries online, so it will be vital to attracting new shoppers by providing a frictionless, convenient and pleasant shopping experience both online and off,” says Stéphane Roger, global shopper and retail director at Kantar Worldpanel.

“We predict that by 2025 online will represent over 10% of global FMCG sales. While China Mainland and the US will continue to lead the way and Asian markets will stay at the cutting edge of online adoption, there is still much to play for worldwide – especially by exploring opportunities to invest in emerging markets like India, Indonesia, Brazil, Mexico and Africa.”

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