In 2022, online sales of Fast-Moving Consumer Goods will reach 12%
Amazon, Alibaba and JD.Com are making noise in the industry. However, the share of e-commerce in Fast Moving Consumer Goods (FMCG) is only at 7% of the global market of Foods and Consumers Goods. What factors, including structural, cultural or economic boost this low percentage by 2022? Nielsen delivers forecasts as part of a global study.
Sectors such as travel, textiles, and electronics have been heavily impacted by e-commerce. It is not the case for Foods and Consumer Goods. Today, online sales account for “only 7%” of this huge sector of Fast-Moving Consumer Goods (F.M.C.G.). In the same way, the market share of e-commerce in France was 6.6% for F.M.C.G., 13% in clothing and furniture, 28% in home appliances and 45% in cultural products, all in 2017.
E-commerce remains low because of specific constraints of delivery, especially freshness and the quality of food products. However, there are further reasons. In advanced countries such as Germany, with dense populations of 80 million, the network of “traditional” retail gives easy access to stores. Subsequently, the use of Internet and home delivery is not as essential, as explored by Nielsen in a study on e-commerce opportunities in F.M.C.G.
First forecast: if the current trend continues at 20% growth/year, four times more than for the “classic” retail, e-commerce should exceed “offline” sales by 2037. It is more likely that we will see a future convergence between on and off-line, linked by click-and-collect and new home delivery systems, plus a development of omni-channel. Nielsen estimates that e-commerce for F.M.C.G. will reach US$400 billion by 2022, which will represent between 10% and 12% of the global market for such products. Second forecast: the speed of development of e-commerce will depend on many factors, including technical, structural, economic or cultural. Nielsen released 10 Key Factors of success ranging from number of bank accounts (essential to online payments) to consumption and savings habits. Here are the main drivers of growth for online sales in each country, according to Nielsen: