Asia to boost FMCG ecommerce to $53bn by 2016

E-commerce

by Byomakesh Biswal| 17 June 2014

It is fast and it moves - even faster online as UK leads the FMCG ecommerce with 22%.

Shoppers will buy more than $53bn worth of FMCG goods online by 2016, growing 47% from the current level of $36bn.

According to a report from Kantar Worldpanel, FMCG ecommerce will account for 5.2% of global FMCG sales in next two years rising from 3.7%.

Asian region is expected to see major growth with South Korea driving the growth with its online sales accounting for 13.8% of FMCG sales by 2016.

In 2013, about 55% of the South Korean shoppers go online to buy things, far ahead of their Asian peers, with 36% in Taiwan buying online while 28% of shoppers in China buying online.

The number of online shoppers is expected grow rapidly in Taiwan and China with FMCG ecommerce accounting for 4.5% and 3.3% share of the total FMCG market respectively in these countries.

In European region, UK leads the FMCG ecommerce with 22% of the shoppers preferring to shop online which account for 4.9% of the total online FMCG market.

FMCG ecommerce

British online shoppers shop online once a month while their online shopping carts are five times bigger than offline.

Growth in online shopping is expected grow faster in France with the growth of click and collect offer known "Drive", which will help France to overtake UK by 2016.

The market share of online FMCG in France will be 6.1% compared to 5.5% market share in UK.

Kantar Worldpanel Global Shopper and Retail director Stéphane Roger said although online only makes up a small share of FMCG sales at the moment, all countries are witnessing considerable growth.

"The future belongs to retailers and brands that see the bigger picture and leverage the opportunities provided to broaden their target markets," Roger said.

"Being a slow adopter has the potential to significantly damage sales and erode market share."

The report revealed that the online shoppers, typically middle and upper class likely to prefer branded products over own-label making it an ideal platform for brands.

Researchers also found that some retailers believe that having online presence will impact their physical store shopping, but the report finds that the concerns are not true.

"One of the main concerns for FMCG players, is that ecommerce will take spend away from physical channels. However, this is also one of the biggest misconceptions. Having an online offer helps retailers to secure additional revenue rather than cannibalising existing spend in brick and mortar stores," Roger said.

Photo courtesy: Kantar Worldpanel

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