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Global FMCG Online Sales Grew by 26% in 2016, According to Kantar Worldpanel

Kantar Worldpanel’s quarterly FMCG E-commerce Index, published today, reveals the global growth of the FMCG e-commerce market. In 2016, global FMCG online sales grew by 26%, with e-commerce now contributing to 35% of global FMCG growth.

The share of grocery shopping conducted online continues to rise, particularly in the world’s most advanced e-commerce markets, such as South Korea, China and the UK. In the UK, online sales grew from 6.7% to 7.3% value share in the last year alone. British shoppers are second only to South Koreans in the proportion of groceries they buy online.

Table 1: E-commerce value share per markets

(Percentage of e-commerce FMCG purchases vs. total consumers FMCG purchases across all channels)

   
                                  E-commerce     E-commerce     Percentage
                                    value share    value share    point change
                Market                  2015           2016          (yoy)
             South Korea               14.6%          19.7%           5.1
                  UK                    6.7%           7.3%           0.6
            Mainland China              4.0%           5.7%           1.7
                Taiwan                  4.5%           5.7%           1.2
                France                  5.1%           5.5%           0.4
                Spain                   1.3%           1.7%           0.4
               Portugal                 0.8%           1.0%           0.2
              Argentina                 1.0%           0.8%           -0.2
               Malaysia                 0.4%           0.7%           0.3
               Thailand                 0.3%           0.6%           0.3
               Vietnam                  0.3%           0.4%           0.1
                Brazil                  0.1%           0.1%            0

 

In 2016, FMCG e-commerce value growth was highest in the most mature markets in Asia: China (+53%) and South Korea (+41%).

In Europe, the countries with the strongest sales growth are Spain and Portugal, up +29% and +24% respectively, with the biggest e-commerce markets, UK and France, still growing at a pace of +8%.

While China and South Korea are clearly embracing the digital shopping experience, Latin America remains less engaged. In the US, the share of e-commerce represents just 1.5%. However, with initiatives from Amazon and more established US grocery retailers, the region is likely to catch up quickly.

Table 2. Evolution of consumers online purchases of FMCG products in 2016 by percentage value share

   
                          Value share
                           evolution

     Market                2016 vs 2015
    Thailand                 109%
    Vietnam                   74%
    Malaysia                  68%
    Mainland China            53%
    South Korea               41%
    Taiwan                    36%
    Spain                     29%
    Portugal                  24%
    France                    8%
    UK                        8%
    Brazil                    8%
    Argentina                 7%

 

FMCG e-commerce penetration

Kantar Worldpanel identifies three key e-commerce markets: advanced, mature and emerging. South Korea leads the advanced market, where almost 70% of the population is shopping online more than once per month. The UK, France, USA, Mainland China and Taiwan sit within the mature market where online is reaching more than 25% of the population.

The emerging market covers regions such as parts of Latin America, where e-commerce’s share remains small with less than 10% of the population shopping online. However, this should grow as connectivity improves and a new group of consumers have access to online shopping for the first time.

The proportion of the population that has purchased FMCG goods online at least once per year is steadily increasing across the globe, aside from Argentina.

Table 3. Percentage of households that bought online FMCG products at least once each year

   
                         E-commerce %
                          penetration      E-commerce %
    Market                   2015        penetration 2016
    South Korea              64.0%            69.4%
    Mainland China           44.6%            54.6%
    Taiwan                   43.3%            49.3%
    UK                       27.4%            27.5%
    France                   24.6%            26.2%
    Spain                    21.6%            24.7%
    Malaysia                 5.4%              9.8%
    Vietnam                  5.4%              8.0%
    Thailand                 4.0%              7.3%
    Argentina                7.2%              6.7%
    Portugal                 6.1%              6.5%
    Brazil                   1.9%              2.3%

 

FMCG e-commerce frequency

Frequency of online shopping is also increasing globally, with UK online shoppers buying more often than anywhere else, purchasing an average of 15.4 times a year, up from 14.1 in 2015.

Table 4. Average number of FMCG purchases made per household each year through online channels

   
                      E-commerce      E-commerce
    Market              frequency 2015  frequency 2016
    UK                       14.1            15.4
    South Korea              12.7            15.2
    France                    9.3            9.8
    Argentina                 7.7            7.3
    Mainland China            5.0            6.1
    Taiwan                    4.0            4.7
    Portugal                  3.7            4.0
    Spain                     3.0            3.5
    Malaysia                  3.0            2.5
    Vietnam                   2.3            2.3
    Thailand                  2.0            2.3
    Brazil                    1.5            1.4

 

FMCG e-commerce spend per shopping trip
Whilst frequency of online shopping is on the rise, the average spend per shopping occasion remains much higher than offline. The average online spend is twice as high as offline in South Korea, Taiwan and France, and over four times as high in the UK. At $83.40, UK online baskets are the largest in the world.

Our data also shows that in the UK, the average e-commerce shopping occasion is worth $64.90 more than the average offline shopping trip. The higher online spend is a combination of shoppers choosing online primarily for large stock up trips and retailers requiring a minimum spend.

Table 5. FMCG online spend per occasion in US Dollars 2015 vs 2016

   
                       FMCG online spend  FMCG online spend
                         per occasion in    per occasion in
    Market                     2015               2016
    UK                       85.2 USD           83.4 USD
    France                   71.2 USD           68.6 USD
    Portugal                 51.3 USD           53.5 USD
    Spain                    46.5 USD           43.8 USD
    Taiwan                   33.5 USD           33.7 USD
    South Korea              21.3 USD           22.8 USD
    Argentina                16.9 USD           20.2 USD
    Mainland China           19.5 USD           19.2 USD
    Brazil                   20.2 USD           18.8 USD
    Malaysia                 10.9 USD           17.8 USD
    Thailand                 18.0 USD           17.3 USD
    Vietnam                  14.6 USD           16.1 USD

 

Table 6. Difference in average spend per occasion online vs offline

   
                                                   Incremental
                   Online spend    Offline spend   spend per        Index spend
                   per occasion in per occasion in occasion online  online vs
    Market         2016            2016            vs offline       offline
    UK                83.4 USD        18.5 USD         64.9 USD           4.5
    France            68.6 USD        34.3 USD         34.3 USD           2.0
    Portugal          53.5 USD        38.2 USD         15.3 USD           1.4
    Spain             43.8 USD        16.2 USD         27.6 USD           2.7
    Taiwan            33.7 USD        14.0 USD         19.7 USD           2.4
    South Korea       22.8 USD        10.4 USD         12.4 USD           2.2
    Argentina         20.2 USD        11.9 USD         8.3 USD            1.7
    Mainland China    19.2 USD        14.8 USD         4.4 USD            1.3
    Brazil            18.8 USD        13.4 USD         5.4 USD            1.4
    Malaysia          17.8 USD         6.6 USD         11.2 USD           2.7
    Thailand          17.3 USD         2.6 USD         14.7 USD           6.7
    Vietnam           16.1 USD         4.4 USD         11.7 USD           3.7

 

Stéphane Roger, global shopper and retail director, Kantar Worldpanel, explains:

“This report provides a snapshot update on the FMCG global e-commerce market. We wanted to provide our clients with up to date findings, given this is such a fast changing market. Even since last September’s ‘The future of e-commerce in FMCG’ report, we have seen significant changes in global e-commerce-a growth acceleration of +26% vs. +15% in 2015.

“The future development of e-commerce is strongly connected to the culture, habits and beliefs of each country. Kantar Worldpanel’s quarterly e-commerce index is designed to help retailers and brands navigate their online future; a one size fits all approach will not work.”

Eric Batty, global e-commerce business development director, Kantar Worldpanel continues:

“E-commerce accounts for 4.6 % of the FMCG market globally but represents 35% of the growth-eight times its weight in the market. E-commerce may only reach a small proportion of grocery shoppers but it’s no surprise that manufacturers are investing considerably in this channel – many of them creating dedicated teams to build their online strategies – because it represents the main accelerator to their future growth.”

Fraser McKevitt, head of retail and consumer insight, Kantar Worldpanel UK adds:

“Less than one third of UK households currently buy their groceries online, suggesting there is still significant headroom for e-commerce to grow from 2016’s 7.3% market share. The biggest increases in uptake are seen from slightly older shoppers; a combination of families retaining the habit even as their children grow up, and more mature households now feeling confident to take the digital shopping plunge. The biggest challenge remains resolving the tension between what connected consumers want and how retailers can deliver this profitably.”

About Kantar Worldpanels FMCG Ecommerce Index

This quarterly study is based on the research extracted from Kantar Worldpanel global consumer panels. Kantar Worldpanel tracks shopping behaviour in 60 countries through a sample of 450,000 shoppers worldwide that provide exhaustive and continuous information of their shopper behaviour. A section of 130,000 of them, representing purchase behaviour in Argentina, Brazil, Mainland China, France, Malaysia, Portugal, South Korea, Spain, Taiwan, Thailand, UK and Vietnam, have been used in the creation of this quarterly barometer.

Please note that loose fresh produce is excluded from the definition of FMCG and grocery.

If you would like direct access to more insights on e-commerce, please download the latest version of Kantar Worldpanel’s e-commerce report.

About Kantar Worldpanel

Kantar Worldpanel is the global expert in shoppers’ behaviour.

Through continuous monitoring, advanced analytics and tailored solutions, Kantar Worldpanel inspires successful decisions by brand owners, retailers, market analysts and government organisations globally.

With over 60 years’ experience, a team of 3,500, and services covering 60 countries directly or through partners, Kantar Worldpanel turns purchase behaviour into competitive advantage in markets as diverse as FMCG, impulse products, fashion, baby, telecommunications and entertainment, among many others.

For further information, please visit us at www.kantarworldpanel.com.

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About Kantar

Kantar is one of the world’s leading data, insight and consultancy companies. Working together across the whole spectrum of research and consulting disciplines, its specialist brands, employing 30,000 people, provide inspirational insights and business strategies for clients in 100 countries. Kantar is part of WPP and its services are employed by over half of the Fortune Top 500 companies.

For further information, please visit us at www.kantar.com

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