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South Korea is world's top online FMCG market

Update On :12 October 2016

South Korea is world's top online FMCG market

South Korea was the world's top market for online grocery sales for the 12 months preceding June 2016. This was the conclusion from the third annual Future of e-Commerce in FMCG (Fast Moving Consumer Goods) study by Kantor WorldPanel, a firm that tracks consumer buying behavior worldwide.

The report noted that sales of groceries through e-commerce platforms reached $48 billion in the 12 months to June 2016.

E-commerce now accounts for 4.4% of all FMCG sales. However, despite the growth of e-commerce, the growth of the entire FMCG market was flat performance during the same period, increasing just 1.6%.

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, said Stéphane Roger, the global shopper and retail director at Kantar Worldpanel.

We forecast it will grow to 9% of the market and be worth $150 billion by 2025. With new entrants such as Amazon expanding rapidly, the industry is facing a shake-up, he said.

E-commerce growth is also unequal, differing from country to country. Although connectivity plays a part, it is not clear whether it is the primary reason for the growth.

For example, while South Korea is the world’s largest online FMCG market by value share (16.6%), US consumers only bought 1.4% of groceries online. Meanwhile, China's netizens are catching up. The report noted that the country saw the biggest growth in the last 12 months, 47% – to a value share of 4.2%.

Meanwhile, Europeans have a relatively low adoption of e-commerce in all countries except the UK with 6.9% of the market and France which has 5.3%.

According to Kantar WorldPanel, France is a relatively unique e-commerce market with their success with the Drive model, where online purchases are collected from the store.

Other conclusions are Online buyers tend to continue to keep buying online after their first purchase. Online buyers are less impulsive, based on comparative research across UK, France and China. 50% of FMCG purchases in China is on beauty. Online buyers splurge more on a single visit online. 55% of online shoppers tend to use the same shopping list for the next purchase.

News Source From : http://www.retailnews.asia/south-korea-worlds-top-online-fmcg-market/

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