Kantar Worldpanel’s quarterly FMCG E-commerce Index, published today, 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)
E-commerce E-commerce Percentage
value share value share point change
Market 2015 2016 (yoy)
South Korea 14.6% 19.7% 5.1
UK 6.7% 7.3% 0.6
Mainland China 4.0% 5.7% 1.7
Taiwan 4.5% 5.7% 1.2
France 5.1% 5.5% 0.4
Spain 1.3% 1.7% 0.4
Portugal 0.8% 1.0% 0.2
Argentina 1.0% 0.8% -0.2
Malaysia 0.4% 0.7% 0.3
Thailand 0.3% 0.6% 0.3
Vietnam 0.3% 0.4% 0.1
Brazil 0.1% 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
Value share
evolution
Market 2016 vs 2015
Thailand 109%
Vietnam 74%
Malaysia 68%
Mainland China 53%
South Korea 41%
Taiwan 36%
Spain 29%
Portugal 24%
France 8%
UK 8%
Brazil 8%
Argentina 7%
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
E-commerce %
penetration E-commerce %
Market 2015 penetration 2016
South Korea 64.0% 69.4%
Mainland China 44.6% 54.6%
Taiwan 43.3% 49.3%
UK 27.4% 27.5%
France 24.6% 26.2%
Spain 21.6% 24.7%
Malaysia 5.4% 9.8%
Vietnam 5.4% 8.0%
Thailand 4.0% 7.3%
Argentina 7.2% 6.7%
Portugal 6.1% 6.5%
Brazil 1.9% 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
E-commerce E-commerce
Market frequency 2015 frequency 2016
UK 14.1 15.4
South Korea 12.7 15.2
France 9.3 9.8
Argentina 7.7 7.3
Mainland China 5.0 6.1
Taiwan 4.0 4.7
Portugal 3.7 4.0
Spain 3.0 3.5
Malaysia 3.0 2.5
Vietnam 2.3 2.3
Thailand 2.0 2.3
Brazil 1.5 1.4
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
FMCG online spend FMCG online spend
per occasion in per occasion in
Market 2015 2016
UK 85.2 USD 83.4 USD
France 71.2 USD 68.6 USD
Portugal 51.3 USD 53.5 USD
Spain 46.5 USD 43.8 USD
Taiwan 33.5 USD 33.7 USD
South Korea 21.3 USD 22.8 USD
Argentina 16.9 USD 20.2 USD
Mainland China 19.5 USD 19.2 USD
Brazil 20.2 USD 18.8 USD
Malaysia 10.9 USD 17.8 USD
Thailand 18.0 USD 17.3 USD
Vietnam 14.6 USD 16.1 USD
Table 6. Difference in average spend per occasion online vs offline
Incremental
Online spend Offline spend spend per Index spend
per occasion in per occasion in occasion online online vs
Market 2016 2016 vs offline offline
UK 83.4 USD 18.5 USD 64.9 USD 4.5
France 68.6 USD 34.3 USD 34.3 USD 2.0
Portugal 53.5 USD 38.2 USD 15.3 USD 1.4
Spain 43.8 USD 16.2 USD 27.6 USD 2.7
Taiwan 33.7 USD 14.0 USD 19.7 USD 2.4
South Korea 22.8 USD 10.4 USD 12.4 USD 2.2
Argentina 20.2 USD 11.9 USD 8.3 USD 1.7
Mainland China 19.2 USD 14.8 USD 4.4 USD 1.3
Brazil 18.8 USD 13.4 USD 5.4 USD 1.4
Malaysia 17.8 USD 6.6 USD 11.2 USD 2.7
Thailand 17.3 USD 2.6 USD 14.7 USD 6.7
Vietnam 16.1 USD 4.4 USD 11.7 USD 3.7
Stéphane Roger, global shopper and retail director, Kantar Worldpanel, explains:
“This report provides a snapshot update on the FMCG global e-commerce market. We wanted to provide our clients with up to date findings, given this is such a fast changing market. Even since last September’s ‘The future of e-commerce in FMCG’ report, we have seen significant changes in global e-commerce-a growth acceleration of +26% vs. +15% in 2015.
“The future development of e-commerce is strongly connected to the culture, habits and beliefs of each country. Kantar Worldpanel’s quarterly e-commerce index is designed to help retailers and brands navigate their online future; a one size fits all approach will not work.”
Eric Batty, global e-commerce business development director, Kantar Worldpanel continues:
“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.”
About Kantar Worldpanel‘s FMCG E–commerce Index
This quarterly study is based on the research extracted from Kantar Worldpanel global consumer panels. Kantar Worldpanel tracks shopping behaviour in 60 countries through a sample of 450,000 shoppers worldwide that provide exhaustive and continuous information of their shopper behaviour. A section of 130,000 of them, representing purchase behaviour in Argentina, Brazil, Mainland China, France, Malaysia, Portugal, South Korea, Spain, Taiwan, Thailand, UK and Vietnam, have been used in the creation of this quarterly barometer.
Please note that loose fresh produce is excluded from the definition of FMCG and grocery.
If you would like direct access to more insights on e-commerce, please download the latest version of Kantar Worldpanel’s e-commerce report.
About Kantar Worldpanel
Kantar Worldpanel is the global expert in shoppers’ behaviour.
Through continuous monitoring, advanced analytics and tailored solutions, Kantar Worldpanel inspires successful decisions by brand owners, retailers, market analysts and government organisations globally.
With over 60 years’ experience, a team of 3,500, and services covering 60 countries directly or through partners, Kantar Worldpanel turns purchase behaviour into competitive advantage in markets as diverse as FMCG, impulse products, fashion, baby, telecommunications and entertainment, among many others.
For further information, please visit us at www.kantarworldpanel.com.
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About Kantar
Kantar is one of the world’s leading data, insight and consultancy companies. Working together across the whole spectrum of research and consulting disciplines, its specialist brands, employing 30,000 people, provide inspirational insights and business strategies for clients in 100 countries. Kantar is part of WPP and its services are employed by over half of the Fortune Top 500 companies.
For further information, please visit us at www.kantar.com
