28 February, 2019 BeOn

Main trends shaping the FMCG industry

2018 was a tipping point for fast moving consumer goods industry. Despite that each region presents its own particularities, for the first time in 10 years the industry experimented remarkable structural changes at a global level. Shoppers modified their purchase habits, focusing on convenience, making lower prizes a priority and choosing more carefully the acquisition channel. E-commerce, discounters and wholesalers were last year protagonists and it is expected that they concentrate 15% of FMCG sales by 2020. Besides, voice commerce and visits to online platforms via mobile devices increased significantly.

E-Commerce:  the fastest growing channels

During 2018, shoppers changed the way they used to shop.  Many of them migrated to new channels and brands, looking for new purchase experiences. Already in 2017, 76% of FMCG global growth come from different channels than supermarkets and hypermarkets. E-commerce, discounters and whole sellers grew 15%, 5,2% and 4,4% respectively. Projections indicate that they will concentrate 15,3% of FMCG sales by 2020.

Because of the importance they have, supermarkets and hypermarkets are still the main channels, but they present a more moderate growth, with 0,8%. Nonetheless, the advance of internet penetration keeps pushing forward the development of eCommerce, which could represent 7,2% of global market by 2020. In a recent interview, Stephen Roger, Kantar Worldpanel’s Shopper & Retail Global Director, considered that the biggest opportunity lies on e-Commerce. Nevertheless, he also argued that in order to maximize growth, it would be ideal for brands to combine online with offline experiences.

What triggers e-Commerce growth?

To understand what is triggering online commerce, it is essential to know better population composition and shoppers’ context. In Latin America, for example, in 1 out of 4 householders are millennials and already have their own family. This means that customers are less than 34 years-old and that grocery and personal care spending takes a big portion of their incomes. In countries such as China and South Korea and in the south area of Asia, instead, consumers have less time than before for shopping but are more willing to pay more for a service that can meet their needs. Convenience and proximity are key when it comes to shopping. In this kind of contexts, where shoppers have little time to make their purchases and, at the same time, are very familiar with technology, online shopping becomes a very attractive option.

Receiving your order at home provides convenience and saves time, but this is not the only advantage. Many consumers started to choose more economic brands, and eCommerce allows them to compare prices an access to exclusive online discounts, so they can have more control of their budgets.

Smart speakers and mobile: the most popular devices

Purchases through voice commands -Voice commerce- grew markedly during 2018. By March, 20% of the citizens of the United States had a smart speaker. This tendency keeps growing as technology becomes more sophisticated, particularly at more developed countries. Moreover, it is expected that voice searches represent 50% of total searches. Projections also indicate that Voice Commerce can grow to USD 40 billions by 2022. Within the four most sold categories, Grocery reaches the first place, representing 20% of sales. Entertainment, electronics and cloths follow with 19%, 17% and 8% respectively. Last year, 31% of voice-shoppers from the USA made a grocery purchase and another 27% planned to do it in the near future.

Another tendency that characterized 2018 was the use of mobile devices to enter eCommerce platforms. Even though mobile searches keep rising, they do not necessarily translate into purchases: the conversion rate between mobile and desktop is of 49%. Consequently, companies need to focus all efforts not only in developing digitalization but also to adapt it for new devices.




Kantar Worldpanel

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