The global online sales of fast-moving consumer goods (FMCG) increased by 28% last year alone and is expected to hit 118 billion euros globally, by the end of 2025. Although the biggest growth is expected to take place in markets like China and South Korea, still online purchasing will reach at least 10% in the UK and France.
Today, Kantar Worldpanel published a report called ‘Accelerating the growth of e-commerce: 2015 edition’ in which it forecasts FMCG online sales to hit 118 billion euros by the end of 2025. It also shows that FMCG ecommerce increased by 28% globally last year, with most of the growth happening in Asia. China is the fastest growing market (+34%), followed by South Korea (+22%). When we look at Europe, we see that the online FMCG sector grew 20% in the United Kingdom and 12% in France. Kantar now predicts a growth in FMCG ecommerce of 50% in the next ten years.
FMCG categories with highest online share
The report also examined which categories in the FMCG sector has the highest online share. Whereas diapers are popular in the Asian countries, in the UK it’s all about moist wipes (15%), tomato products (11%) and mineral water (10%), tomato products (11%). In France, categories with the highest online share are infant milk powder (12%), baby food (11%) and soups (10%).
Kantar warns retailers an online presence is fast becoming crucial, as FMCG sales growth falters. “In Europe, the 2.2% increase the market saw two years ago had slipped into reverse, with -0.1% in the past year.” Another reason to have an online presence is because in the UK and France, it’s shown that the loyalty of online shoppers to store is greater than that of the average offline shopper. For example, online shoppers in the UK spend 23% of their annual FMCG spend at the same retailer.
How to win in grocery ecommerce
In its report, Kantar shares some tips that should help retailers to win in grocery ecommerce. The first advice is to prepare to invest. “To make FMCG ecommerce work, significant investment is required, from web design to delivery logistics.” The second thing retailers should do is understanding the motivations and needs of shoppers. For example, the top three motivations for purchasing online consists of ‘save time’, ‘price’ and ‘mobile shopping’ in Korea, while in the UK it’s all about ‘control my budget’, ‘save time’ and ‘less effort’.
Other tips from Kantar are “structure your site for easy navigation”, “encourage impulse”, “link with social” and “entertain me”. A simple and clear website should lower the barrier for consumers to shop online, while you need to pursuade them once they’ve entered your online store. This can be done by showing products related to those already in the shopper’s basket, being active on social media channels and by portraying grocery products in an engaging and interesting way.
Ecommerce FMCG 2014 value share: