Online shopping seen to boost sales of fast-moving goods

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Online shopping seen to boost sales of fast-moving goods

By Arra B. Francia, Reporter

MORE people are preferring to shop online driven by the convenience e-commerce platforms have to offer, with sales of fast-moving consumer goods (FMCG) sold online expected to grow by 7.2% by 2020, according to global research firm Kantar Worldpanel.

In a report entitled “Winning Omnichannel: Finding Growth in Reinvented Retail,” Kantar Worldpanel noted that in 2017 alone, the global FMCG market through e-commerce platforms grew by 1.9%. This was driven by less mature markets such as Africa, Latin America, and Asia, which grew by 8.8%, 7.3%, and 4.3%, respectively.

Kantar Worldpanel made use of data from its global research team and partners who employed consumer panel data to measure real shopping behavior and retail choices of over three billion people across 28 countries to come up with the Winning Omnichannel report.

“Our research shows that on a global level, more shoppers are turning from bricks to clicks and thus, e-commerce is significantly growing and is expected to continue outpacing other FMCG sales channels,” Kantar Worldpanel Philippines’ Director Lourdes Deocareza said in a statement.

FMCG from China grew the fastest compared to other developed countries at 29%, generating $15 billion in total e-commerce sales.

Meanwhile, western Europe’s FMCG market was weighed down by inflation, growing by only 2.2%. The United States, meanwhile, only picked up by 0.5%, despite still being the largest contributor to FMCG spending in the world. The US, along with China and Japan, account for 70% of the global FMCG value in e-commerce.

Kantar Worldpanel expects India and Indonesia to further drive FMCG growth in e-commerce platforms in the future.

E-commerce is among the top three fastest-growing channels for FMCG, along with discounters — or retail shops that sell privately labeled products lower than branded prices, and cash and carry, which sells goods from a wholesale warehouse.

Traditional channels such as supermarkets and hypermarkets continued to take the largest share of FMCG sales at 49.2% in 2017. Kantar Worldpanel expects e-commerce, discounters, and cash and carry to grow by a total of 15.3% until 2020, outperforming supermarkets and hypermarkets. Share of traditional channels are projected to slip to 48.4% by 2020.

With this trend, Kantar Worldpanel said consumers are showing that they want convenience and value for money when they shop.

“Brands that adapt their retail strategy to the expected evolution of channels in their region, especially here in the Philippines, will have more possibilities to succeed. They need to understand the changing shopping behavior of the market in order to stay competitive in the FMCG shopping game,” Ms. Deocareza said.