US Insights

China's online sales of FMCG will double by 2025

Jason Yu

Greater China General Manager

Retail 06.17.2019 / 09:00

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By 2025, 31% of fast-moving consumer goods on China’s mainland will be sold online.

Online sales of fast-moving consumer goods (FMCG) grew by 20.3% globally in 2018 and now represent 5.1% of grocery sales worldwide, according to new Kantar Worldpanel data. Growth was spurred by the US and China’s Mainland, which together represent 84% of the growth in global e-commerce thanks to the success of Amazon, Alibaba, JD.com and Walmart.

Market

Online FMCG value growth

Global

+20.3%

US*

+35.9%

China’s Mainland

+32.3%

China's Taiwan

+31.9%

Italy

+26.3%

South Korea

+14.0%

Germany

+11.5%

Spain

+9.1%

France

5.7%

UK

3.5%

Japan

0.8%

Source: Kantar, GfK, Intage, full year 2018

*Estimate Kantar & US Commerce Department

A high penetration of online purchases in Asian economies are made via smartphone, meaning these countries continue to lead the way in terms of online FMCG shopping. Over 19% of all FMCG sales in South Korea now come from online, the highest proportion in the world. China's Mainland follows with 14.0% – though based on current growth rates and the fact that nine in ten online purchases are already made on a mobile, it is expected to overtake South Korea’s position by 2025. Taiwan’s online share of FMCG sales stands at 8.2% and in Japan it has reached 7.7%.

In Western Europe, 4.1% of grocery sales came through e-commerce, primarily led by the UK at 7.2% and France at 5.6%. However, plateauing shopper numbers in both countries mean growth was slower than in the previous year. In contrast, e-commerce sales grew by almost 35% in the Netherlands, where start-ups like Picnic have contributed to a total of 4.5% of FMCG sales now coming through online.

In Eastern Europe, online FMCG is less developed, accounting for just 1.9% of sales in 2018. Only the Czech Republic and Russia registered more than 1.5% of sales online in the region, with 3.3% and 2.2% respectively.

Equally, online FMCG shopping in Latin America remains nascent. While Argentina leads the way, only 0.6% of sales come through e-commerce and this is no increase on the year before. Concerns about security and limited payment methods are still barriers for local consumers in shopping on the web.

Online sales, % of total FMCG sales

E-commerce value share (%)

2017

2018

Global

4.3%

5.1%

South Korea

17.0%

19.1%

China’s Mainland

11.1%

14.0%

China's Taiwan

6.4%

8.2%

Japan

7.6%

7.7%

UK

7.2%

7.2%

France

5.4%

5.6%

Netherlands

3.5%

4.5%

US*

3.3%

4.4%

Czech Republic

3.0%

3.3%

Denmark

2.2%

2.6%

Spain

2.2%

2.4%

Austria

2.5%

2.3%

Russia

2.4%

2.2%

Malaysia

1.5%

1.8%

Italy

1.4%

1.7%

Portugal

1.6%

1.6%

Germany

1.4%

1.5%

Hungary

1.1%

1.5%

Slovakia

1.2%

1.2%

Poland

1.1%

1.1%

Argentina

0.6%

0.6%

Croatia

0.5%

0.6%

Bulgaria

0.2%

0.3%

Indonesia

0.1%

0.2%

Chile

0.1%

0.2%

Colombia

0.1%

0.2%

India

0.1%

0.1%

Philippines

0.0%

0.1%

Brazil

0.1%

0.1%

Source: Kantar, GfK, Intage, full year 2018

*Estimate Kantar & US Commerce Department

Pure players driving growth

Globally, it is the online pure players like Amazon, Alibaba and JD.com which are winning in the e-commerce market as they continue to attract new shoppers. Pure players now represent 72% of online sales, posting a staggering collective growth of 29% in 2018. In the face of this competition, retailers operating across both bricks and mortar and e-commerce channels grew by only 3% in comparison, though reducing the delivery delay and offering free, or cheaper, options would help multi-channel retailers to close this gap.

The pure play giants are dominating on both sides of the globe – Amazon now represents 53% of all FMCG online sales in the US. While Amazon has not yet been able to hit equal heights in Europe, it has achieved online FMCG market shares of 8.8% and 5.0% in Germany and France and is up to 3.2% in Spain and 1.0% in the UK. 

Value share (%)

Pure players

Traditional retailers

Global

71.8%

28.2%

China Mainland

99.1%

0.9%

China's Taiwan

92.7%

7.3%

US*

60.0%

40.0%

Denmark

52.8%

47.2%

Germany

48.4%

51.6%

Russia

43.0%

57.0%

Spain

24.4%

75.6%

UK

16.2%

83.8%

Austria

11.7%

88.3%

Source: Kantar / GfK, full year 2018

*Estimate Kantar & US Commerce Department

Eric Batty, global e-commerce business development director at Worldpanel Division, Kantar, comments: “While online sales for multi-channel retailers in Europe tend to focus on traditional food and drink products, Amazon’s sales are more heavily skewed towards personal care. In France, for instance, while Amazon is the online leader in personal care for food and drink it ranks only seventh. There, traditional bricks and mortar retailers have found success through in click-and-collect, with the likes of E.Leclerc 20 times bigger than Amazon for online food sales thanks to its DRIVE pick-up points.”  

Online to be the leading channel in Asia by 2025

Kantar predicts that online will represent close to a third of total FMCG sales in China by 2025 and a quarter in South Korea. In the UK and France, those figures are expected to hit 9% and 8% respectively in the same time.

Stéphane Roger, global shopper and retail director at Worldpanel Division, Kantar, comments: “By 2025, e-commerce will represent 10% of all FMGC spend across the globe, twice its current size. On and offline integration, intelligent technology and direct-to-consumer options will all help to attract new shoppers online, where currently penetration is at just 21%.”

Predicted online FMCG share in 2025, %

E-commerce value share (%)

Forecast 2025

Global

10%

China’s Mainland

31%

South Korea

24%

China's Taiwan

20%

US*

12%

UK

9%

France

8%

Argentina

3%

Brazil

3%

Mexico

3%

Source: Kantar

*Estimate Kantar & US Commerce Department 

Source: Kantar Worldpanel, Kantar

Editor's Notes

* These findings are based on Kantar, GfK and Intage data for the 12 months ending December 2018. This research tracks 428,000 households that provide exhaustive and continuous information of their shopper behaviour in 46 countries.

Fresh produce is excluded from the definition of online FMCG.

Western Europe includes Austria, Denmark, France, Germany, Italy, Netherlands, Portugal, Spain and the UK; Eastern Europe includes Bulgaria, Croatia, Czech Republic, Hungary, Poland, Russia and Slovakia.

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