Online shopping in FMCG set to rise

Wednesday, Jul 09, 2014 17:25

Only two per cent of Vietnamese city dwellers purchase Fast Moving Consumer Goods (FMCG) online, according to a market report by Kantar Worldpanel. The company predicts that online shopping in FMCG market will be on the rise with Asia taking the lead. — Photo
HA NOI (Biz Hub) — Online shopping of Fast Moving Consumer Goods (FMCG) total 0.1 per cent of its consumption, with just two per cent of Vietnamese city dwellers making online purchases in 2013.

However, with faster Internet connections expected in Viet Nam, online shopping of FMCG was expected to grow, a market report by Kantar Worldpanel said.

E-commerce was hugely popular in the US, reporting four per cent sales of FMCG, the report showed. In Europe, e-commerce sales were 4.9 per cent and in UK and France it was 3.9 per cent each.

By 2016, France was expected to overtake the UK in terms of market share. China, however, was expected to witness the fastest growth in online shopping of FMCG by 2016 at an estimated rate of 75 per cent.

According to the report, Asia would be the new leaders with Africa and Latin America following close behind. In Asia, 55% of South Korean shoppers are buying online and the country will continue to lead, accounting for 13.8% of FMCG sales by 2016. Taiwan and China will also make rapid strides in the online FMCG market to grab 4.5 per cent and 3.3 per cent of the market share, respectively.

By 2016, e-commerce will contribute $53 billion to global FMCG sales. That is an increase of $17 billion (47%) on the current $36 billion, accounting for 5.2 per cent of global FMCG sales - up from 3.7 per cent at present.

The survey also said there were other factors that contributed to the rise in online shopping. Apart from the fun aspect, shoppers looking to buy FMCG also saved time and money.

It urged retailers and brands to provide online-only promotions, daily deals and flash sales to encourage shoppers to do more online buying and make it a routine.

Stéphane Roger, Global Shopper and Retail Director at Kantar Worldpanel, was quoted on the company website as saying that even though online shopping still made up a small segment of FMCG sales at present, all countries were 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. Being a slow adopter has the potential to significantly damage sales and erode market share," he said.

The report was based on an in-depth analysis of the purchasing habits of 100,000 households in ten of the biggest online FMCG markets. — VNS

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