Global online sales of FMCG products is growing four times faster than offline sales, and in the coming years European markets will experience increase in FMCG e-commerce on account of work-life dynamics, increasing congestion and growing need for convenience, according to a new report by global measurement company, Nielsen.
The Nielsen Future Opportunities in FMCG E-commerce Report, which examines the current growth drivers of FMCG e-commerce in 34 markets, highlights the rapid pace at which FMCG e-commerce will grow over the coming years (18.4% CAGR annually) and estimates total global sales will reach as high as US$400 billion by 2022. European markets are expected to provide growth opportunities for online FMCG over the next five years, with more than a quarter of consumers (26%) already using e-commerce platforms for home delivery of products. UK is leading the total share of FMCG online sales (6.3%), closely followed by France (6.1% of FMCG sold online) that has a nationwide click-and-collect e-commerce model since early 2000s making e-commerce successful despite low population density. Switzerland, Italy and the Netherlands also rank in the top five market share of FMCG sales online (1.8%, 1.7% and 1.5% respectively) in Western Europe. Other Western European markets covered in the report include Belgium, Spain, Germany and Portugal. Nielsen estimates that Portugal’s 2017 e-commerce share of total FMCG sales (less than 1%) will increase to 1.6% (US$430 million) by 2022.
The Nielsen report identifies some of the key future drivers of FMCG e-commerce growth, including:
● Foundational growth drivers: market size, bank account penetration, internet penetration, smartphone penetration
● Macro-economic growth drivers: ease of doing business, population density, postal reliability
● Social growth drivers: trust, savings culture
● Supply growth drivers: maturity of FMCG e-commerce players
In Nordic markets, over one in four consumers (25%) are willing to purchase online for home delivery of products indicating significant prospects for FMCG e-commerce. Norway has better public services, progressive social attitudes and quality infrastructure. Further, consumers are willing to adopt new online models and there are opportunities for greater cross border e-commerce with other Nordic markets, particularly for specialist categories and products. Nielsen estimates that Norway’s 2017 e-commerce share of total FMCG sales (1%) will increase to 2.2% (US$678 million) by 2022. Other Nordic markets covered in the report include Sweden and Denmark.
In Poland, recent economic growth, improving job prospects and higher incomes are driving healthy consumption. Nielsen estimates that Poland’s 2017 e-commerce share of total FMCG sales (less than 1%) will increase to 1.9% (US$637 million) by 2022. Other Eastern European markets covered in the report include Turkey and Russia.
Mathias Bernhardt, Global Business Partner, Retailer Services, Nielsen says: “There are significant social indicators in European markets, that are conducive for FMCG e-commerce. Further adoption and acceleration of online FMCG is supported by ageing, increasingly busy lifestyles, urbanisation and big companies starting to heavily invest in e-commerce recently. Better e-commerce services that enable consumers to save time will continue to make the need for omni-channel offerings more critical for FMCG retailers across Europe.”
