28 February, 2019 BeOn

Mercado libre will focus on FMCG during 2019

Mercado Libre set a goal for 2019: to develop online sales for FMCG products. Their strategy includes the reorganization of a bigger team dedicated to CPG sales and to work together with the main brands. In the first edition of a series of monthly meetings with the most important companies of the industry, Mercado Libre published their firsts insights about fast-moving consumer goods shoppers’ behavior during 2018 and main tendencies for 2019. BeOn attended the event. In this article we share the main messages delivered by the company.

 

Mercado Libre Argentina decided to reorganize the designated team for FMCG sales in Argentina and to make it bigger. The main goal -at least at this early stage- will be to make the Business Intelligence area stronger in order to obtain relevant information. This will be useful not only for the internal team but also to share with their external partners. This will also  allow them to help companies in the development of a digital strategy. In the long term they expect to build stronger alliances and to have a bigger team that can be able to offer personalized attention to each brand.

Marketplaces are becoming increasingly important for online sales. To a large extent, this is because of the integrated digital ecosystem that these platforms offer that usually include safe delivery and purchase and a wide range of payment methods. Entry barriers are relatively low for brands and growth opportunities, high.

Event though Mercado Libre’s bet for FMCG is incipient, the growth has been accelerated and is now bigger than in more mature and developed categories. CPG possess 7 million sessions per month nowadays.

 

Pet food

This category accelerated its growth last year, particularly since June. This phenomenon can not only be seen at Marketplaces but also at Last Mile apps -such as Rappi and Glovo-, that incorporated specialized stores and started to offer this service. To buy pet food online became a new trend because shoppers can avoid carrying heavy and big packages. At Mercado Libre, premium pet food and heavyweight packages are the tendency. Users are not buying in bulk. Instead, they prefer to purchase one product at a time.

 

Food and beverages

This is one of the widest categories within FMCG: it includes fresh and dry groceries, alcohol and non alcoholic beverages. It also represents 20% of CPG sales.

At marketplaces, shoppers do not behave in the same way that they do at online supermarkets platforms. What buyers seem to be looking for at Mercado Libre are premium and organic products -that is to say, products that are more difficult to find at stores- and in bulk. Since the average ticket is usually low, brands will have to put their efforts in making it higher, so delivery costs are justified. To do so, it would be ideal that brands start to offer products in packs. With this policy, in conjunction with competitive prices, companies like Quilmes achieved to reach the top sales at Cyber Monday 2018.

 

Baby care

Baby care category is the smallest of the platform but the fastest growing one. During last December, it registered a growth of 400%. Customers’ demand does not vary a lot: diapers and formula milk make almost 100% of online orders. Parents prefer hyper packs with free shipping to have a stock at home and to avoid carrying voluminous packages.

 

Home and personal care

Home care products are the ones with lower penetration in Mercado Libre Argentina. At this stage, items with limited physical distribution, premium quality and high average ticket are the most required. Nevertheless, this does not mean that there is no place for FMCG brands.

Personal care, on the other hand, is one of the most developed categories of the platform. Consumers tend to buy specialized products, but also mass consumed ones. In both cases, it is essential that brands start working to offer packs with mixed products and to make stronger their alliances with retailers that already have an official store at Mercado Libre -such as Walmart, GPS Farma or Mayoristas Masivos- so they can encourage pick up at store. This will promote growth and will make products more attractive for family consumption.

 

Market places: a great opportunity por FMCG

The growth of visits and sales of FMCG categories at Mercado Libre mean a great opportunity to maximize the potential of online commerce. To enter a market that already possess 7 million monthly visits is a great starting point. Nonetheless, brands need to get those visitors in their own categories and official stores, so they will have to put all efforts and align their digital strategies with shoppers demands.

 

Mercado Libre’s tendencies seem to indicate that during 2019 packs and mixed products will be the best sellers. FMCG companies will have to work in their omnichannel strategy. On one hand, they will need to reinforce their alliances with operators and retailers, with the aim of promoting pick up at store -particularly for products with a low average tickets- in order to avoid high delivery costs. On the other hand, companies also need to align their digital content to create an effective and differential purchase experience.

Mercado Libre plans to continue sharing valuable information with their partners and will keep working in the creation of solutions that make online shopping a more attractive experience. One of their first actions will include the confection of monthly reports for official stores and the promotion of their new delivery service that offer same 24hs delivery: Mercado Envíos Flex.

 

Without a doubt, 2019 will be an important year for the development of online sales of FMCF products in Latin America and Mercado Libre will play an important part on it. The challenge for brands will be to incorporate innovations in their eCommerce strategies so they can succeed at online sales.

 

Source:

Mercado Libre