As shoppers increasingly buy merchandise online, global e-commerce sales of packaged goods are expected to jump to $53 billion by 2016, an increase of $17 billion (47 percent) on the current $36 billion, according to a study from Kantar Worldpanel.
Current e-commerce sales of fast moving consumer goods (FMCG) will account for 5.2 percent of total sales, up from the current 3.7 percent, according to the study.
The study predicts that Asia will be the next major growth market. South Korea will continue its lead position with online accounting for 13.8 percent of FMCG sales by 2016. Today, 55 percent of Korean shoppers buy online, an exceptionally high figure that is not matched by any other country in the world. Online FMCG market share will continue to grow rapidly in Taiwan and China as well, to achieve 4.5 percent and 3.3 percent share of the total FMCG market, respectively.
While the U.K. is the trailblazer of the European online FMCG market, France is expected to eclipse the U.K. by 2016 with 6.1 percent versus 5.5 percent of market share, respectively.
“Although online only makes up a small share of FMCG sales at the moment, all countries are witnessing considerable growth,” said Stéphane Roger, global shopper and retail director at Kantar Worldpanel. “The future belongs to retailers and brands that see the bigger picture and leverage the opportunities provided to broaden their target markets. Being a slow adopter has the potential to significantly damage sales and erode market share.”
The report reveals the barriers and misperceptions that prevent retailers and brands from engaging with the online channel. They include a fear that having an online presence will mean sales in physical stores will be cannibalized and that consumers will become less loyal if they shop online.
“One of the main concerns for FMCG players is that e-commerce will take spend away from physical channels. However, this is also one of the biggest misconceptions,” said Roger. “Having an online offer helps retailers to secure additional revenue rather than cannibalizing existing spend in brick-and-mortar stores.”
