Kantar Worldpanel Reveals Global E-commerce Grocery Market has Grown 15% to 48 billion USD

London / UK. (kwp) Sales of groceries through e-commerce platforms reached 48 billion USD in the 12 months to June 2016, according to a new report by Kantar Worldpanel, published this week.

The third annual Future of E-commerce in FMCG study shows that e-commerce now accounts for 4.4 percent of all FMCG sales. Whilst the e-commerce channel is growing, the FMCG market as a whole is flat, increasing just 1.6 percent during the same period.

Stéphane Roger, Global Shopper and Retail Director at Kantar Worldpanel, comments: «FMCG growth is slowing, but our data shows that people are looking for more convenience, which can be met by shopping online. Grocery e-commerce, although currently small, with only one in four people shopping online, is growing fast. We forecast it will grow to 9 percent of the market and be worth 150 billion USD by 2025. With new entrants such as Amazon expanding rapidly, the industry is facing a shake-up».

«Although online sales have the potential to cannibalise in-store sales, it is vital that retailers act quickly to develop a strong e-commerce presence. The retailer that goes online first in each market can enjoy a far higher market share – this can be a difference of at least 40 percent in France and up to three times more in the UK. In this report we’ve looked at how retailers and brands are finding ways to work across all channels».

E-commerce share of market 2016

Rank	Country	(value)
01	South Korea	16.6 percent
02	Japan	07.2 percent
03	United Kingdom	06.9 percent
04	France	05.3 percent
05	Taiwan	05.2 percent
06	China	04.2 percent
07	Czech Republic	02.1 percent
08	Spain	01.7 percent
09	The Netherlands	01.7 percent
10	United States	01.4 percent

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Key findings from the report

Global hotspots – a puzzle of performance: E-commerce growth is not equal around the world and is not explained by connectivity. It might not be surprising that digitally developed South Korea is the world’s largest online FMCG market by value share (16.6 percent). In the USA however, only 1.4 percent of groceries are bought online. China is the market which saw the biggest growth in the last 12 months, 47 percent – to a value share of 4.2 percent. Europe has a relatively low adoption of e-commerce in all countries except the UK with 6.9 percent of the market and France which has 5.3 percent. France is a relatively unique e-commerce market as their success is with the Drive model whereby the online shop is collected from the store. Adoption across Latin America is currently very low with the exception of Argentina at 1 percent.

Online generates more loyalty: Once shoppers have begun shopping online they are more likely to continue doing so. Among this group in the UK, almost a quarter (23.3 percent) of all spend is through e-commerce, resulting in fewer trips to physical stores.

Impulse needs encouraging: Comparative research across the UK, France and China has shown that one year after starting to shop online, shoppers in the UK and France spent less overall (minus 2.4 percent and minus 1.4 percent respectively), this is because there is less impulse shopping. Brands need to work on driving impulse purchase online – for example by making suggestions for complementary products. In China, 50 percent of FMCG’s online sales is beauty, it is seen as a prestige occasion and they actually had an increase in sales after one year (plus 8.1 percent).

Online shopping baskets are usually bigger: Shoppers generally spend more per trip online than they do offline, so potentially this could be a lucrative group to win. In the UK for example, the average shop online is 59 USD compared to 15 USD in-store.

Brands that make it onto online shopping lists are more likely to stay there: Kantar Worldpanel data shows that 55 percent of online shoppers use the same shopping list from one purchase to the next. Brands need to focus their efforts on getting onto that list.