E-commerce, cash and carry and discounters gain share
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 & 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% |
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
