Top Menu

Global FMCG online sales grew by 26% in 2016

 

Kantar Worldpanel’s quarterly FMCG E-commerce Index 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)

MarketE-commerce value share 2015E-commerce value share 2016Percentage point change (yoy)
South Korea14.6%19.7%5.1
UK6.7%7.3%0.6
Mainland China4.0%5.7%1.7
Taiwan4.5%5.7%1.2
France5.1%5.5%0.4
Spain1.3%1.7%0.4
Portugal0.8%1.0%0.2
Argentina1.0%0.8%-0.2
Malaysia0.4%0.7%0.3
Thailand0.3%0.6%0.3
Vietnam0.3%0.4%0.1
Brazil0.1%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

MarketValue share evolution

2016 vs 2015

Thailand109%
Vietnam74%
Malaysia68%
Mainland China53%
South Korea41%
Taiwan36%
Spain29%
Portugal24%
France8%
UK8%
Brazil8%
Argentina7%

 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

MarketE-commerce % penetration 2015E-commerce % penetration 2016
South Korea64.0%69.4%
Mainland China44.6%54.6%
Taiwan43.3%49.3%
UK27.4%27.5%
France24.6%26.2%
Spain21.6%24.7%
Malaysia5.4%9.8%
Vietnam5.4%8.0%
Thailand4.0%7.3%
Argentina7.2%6.7%
Portugal6.1%6.5%
Brazil1.9%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

MarketE-commerce frequency 2015E-commerce frequency 2016
UK14.115.4
South Korea12.715.2
France9.39.8
Argentina7.77.3
Mainland China5.06.1
Taiwan4.04.7
Portugal3.74.0
Spain3.03.5
Malaysia3.02.5
Vietnam2.32.3
Thailand2.02.3
Brazil1.51.4

 

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

MarketFMCG online spend per occasion in 2015FMCG online spend per occasion in 2016
UK85.2 USD83.4 USD
France71.2 USD68.6 USD
Portugal51.3 USD53.5 USD
Spain46.5 USD43.8 USD
Taiwan33.5 USD33.7 USD
South Korea21.3 USD22.8 USD
Argentina16.9 USD20.2 USD
Mainland China19.5 USD19.2 USD
Brazil20.2 USD18.8 USD
Malaysia10.9 USD17.8 USD
Thailand18.0 USD17.3 USD
Vietnam14.6 USD16.1 USD

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

MarketOnline spend per occasion in 2016Offline spend per occasion in 2016Incremental spend per occasion online vs offlineIndex spend online vs offline
UK83.4 USD18.5 USD64.9 USD4.5
France68.6 USD34.3 USD34.3 USD2.0
Portugal53.5 USD38.2 USD15.3 USD1.4
Spain43.8 USD16.2 USD27.6 USD2.7
Taiwan33.7 USD14.0 USD19.7 USD2.4
South Korea22.8 USD10.4 USD12.4 USD2.2
Argentina20.2 USD11.9 USD8.3 USD1.7
Mainland China19.2 USD14.8 USD4.4 USD1.3
Brazil18.8 USD13.4 USD5.4 USD1.4
Malaysia17.8 USD6.6 USD11.2 USD2.7
Thailand17.3 USD2.6 USD14.7 USD6.7
Vietnam16.1 USD4.4 USD11.7 USD3.7

 Eric Batty, global e-commerce business development director, Kantar Worldpanel comments: “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”

 

,

CLOSE
CLOSE