E-commerce now contributes to a record 36% of global FMCG growth, Kantar Worldpanel says. By 2025, it will be a $170 billion global business.

Online sales of fast-moving consumer goods (FMCG)—the kinds of low-cost products typically sold in grocery stores—grew 30% in the 12 months ended in March 2017 and now account for 4.6% of global FMCG sales, up from 4.4% a year earlier, according to a recent report from consumer research firm Kantar Worldpanel.

That was twice the online growth rate in 2015 and much higher than the 1.3% increase generated by all FMCG sales channels during the period. By 2015, Kantar Worldpanel projects that 10% of global FMCG sales will happen online, totaling about $170 billion.

In some developing countries where e-commerce of all kinds is still in the early stages, the growth of online FMCG sales during the 12-month period examined was as high as triple digits. The fastest-growing online FMCG markets over the 12-month period that Kantar looked at were Thailand (up 104%), Malaysia (up 88%) and Vietnam (up 69%).

As a continent, the report says, Asia experienced a 44% increase in e-commerce sales of FMCG, making it the fastest-growing global region for the category. With that growth, the online market share of FMCG sales for Asia as a whole now stands at 6.5%. At 5.5%, Europe has the second-biggest market share for online FMCG sales. Latin America is the region where online FMCG sales have the lowest market share, at just 0.2%.

“Retailers and brands are now convinced that investment in growing their online business is crucial, if not mandatory,” the report says. “The myths surrounding e-commerce only five years ago—a ‘small opportunity,’ ‘a poor shopper experience,’ ‘unprofitable’—have all been swiftly discredited.”

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Kantar says the top six contributors to the overall growth of FMCG e-commerce in 2016 were South Korea (where online market share grew to 19.7%), the United Kingdom (7.5%), Japan (7.5%) China (6.2%) France (5.6%) and the United States (1.5%). Worldwide, e-commerce now contributes to a record 36% of global FMCG growth, the report says.

South Korea, where online grocery shopping has the biggest market share by far, is expected to keep its lead. The online share of fast-moving consumer goods is expected to grow to 30% there by 2025.

In Asia in particular, mobile transactions are becoming more important to online FMCG sellers. The report says 20% of all online FMCG purchases in South Korea are made on mobile devices. But mobile is even more important in China. According to the report, the average Chinese consumer who buys groceries online spent $128 in 2016 and 85% of that was on mobile devices.

In the United States, Kantar says, e-commerce sales of FMCG are expected to grow to 8% of the total by 2025, representing $90 billion in online sales. Kantar attributes the projected growth to increasing rollouts of in-store pickup of online orders among grocery chains here.

In-store pickup of online orders is a strategy that has been gaining steam. For example, Rodney McMullen, CEO of The Kroger Co., No. 88 in the Internet Retailer 2017 Top 500recently said the chain plans to have 1,000 pickup locations by the end of 2017. Kroger is the nation’s the largest stand-alone grocery store CHAIN? and second-largest grocer in terms of overall grocery sales. As of earlier this year, Wal-Mart Stores Inc. (No. 3) also offered pickup of online orders at 1,000 stores and was continuing to roll out the offering in new stores.

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