FMCG online sales to reach $130 billion by 2025

Online’s share of FMCG purchasing in advanced e-commerce markets will double in the next 10 years

A report published today by Kantar Worldpanel reveals the true potential for the worldwide FMCG e-commerce market. “Accelerating the growth of e-commerce. 2015 Edition” forecasts FMCG online sales will hit $130 billion by the end of 2025. Online’s share of FMCG purchasing in advanced e-commerce markets will double in the next 10 years and Kantar Worldpanel estimates online purchasing will reach 30% in South Korea, 15% in China and at least 10% in the UK and France.

Global FMCG online sales grew 28% in 2014
With growth of 28% globally in 2014 alone, sales online are rising, particularly in the world’s most advanced e-commerce markets.
FMCG ecommerce grew at a faster pace in Asia with China being the fastest growing market (+34%) followed by South Korea (+22%). In Europe the FMCG ecommerce grew 20% in the UK and 12% in France. South Korea continues to be the country where FMCG online sales are higher - reaching 13.2% of the total FMCG market (compared to 10.2% one year ago).

Opportunities for retailers and brands

The report is based on in-depth analysis of the purchasing habits of 100,000 shoppers in ten of the biggest online FMCG markets and identifies the need for retailers and brands to prioritize their ecommerce strategies to take advantage of the real opportunities that e-commerce brings:

Huge promise: With only 1 in 4 shoppers buying online on a global level, there is enormous headroom for growth. South Korea is a great example of e-commerce potential becoming reality: 58.9% of South Korean households buy FMCG products online at least once a year. In the UK, France and Spain, nearly one out of 4 households buy online but the UK supermarkets are trailblazing in building repetition.

Valuable shopper profile: the typical profile is a family with young children, urban-suburban, middle/upper class. An average online shopper in Vietnam* spends 418,000 VND per trip online compared to the 88,000 VND spent per trip in a brick and mortar store, five times more.

Loyalty: the online share of wallet is already high. In Vietnam* online shoppers spend more of their annual FMCG spend in the same retailer year by year.

Stéphane Roger, Global Shopper and Retail Director at Kantar Worldpanel, explains:
“Since last year’s ‘Accelerating the Growth of E-commerce in FMCG’ report, we have seen major changes in the structure of many retailers and brands. Mondelez, Walmart, Pepsico, Coca-Cola, Procter & Gamble and Unilever have each implemented plans to future-proof their business for e-commerce. It seems that for these global leaders, the talk is fast turning in to action.

Roger stresses that joining the e-commerce race is a matter of urgency: “Simply put: the market is remarkably unkind to latecomers. Winning among the retailers are those which first invested. Tesco in the UK and France’s E.Leclerc both enjoy an online market share double that of their offline counterparts. For brands, the urgency lies in getting on shopping list. Our data shows that 55% of online shoppers use the same shopping list from one purchase to the next, giving first movers a big advantage.”

About the Vietnam* market, Online’s share of the grocery market in Modern Trade rose from 0.4% in 2013 to 1.5% in 2014, with this growth look set to continue well in the years to come. Besides, together with the prevalent speed and convenience trends among Vietnamese consumers and high internet penetration, e-commerce is certainly going to be an inevitable trend. It’s necessary for FMCG brands and retailers should action to proactively engage with consumers through more e-commerce investment. We have more evidence of online practices from both local and international players including Unilever, P&G, Masan, etc. in recent years; which reinforce the message of e-commerce helping their brands approach shoppers in from another direction.

David Anjoubault, General Manager of Kantar Worldpanel Vietnam comments:
“Development of online in Vietnam* will happen at a different pace by sector starting with more individual / premium markets, which is witnessed by the dominance of Personal Care (which accounts for nearly 50% in Online), followed by Milk Powder and after that we may see progression to the other sectors. Thanks to the prevalent speed and convenience trends among Vietnamese consumers and high internet penetration, Vietnam is a promise land yet to be discovered to the fullest where retailers and brands need to focus to develop the online market.”

(*): Vietnam data is only in Urban 4 key cities (Ho Chi Minh City, Ha Noi, Da Nang and Can Tho)