Online sales of fast-moving consumer goods (FMCG) grew faster in the United States than anywhere else, followed closely by consumers in mainland China, according to data from research firm Kantar Worldpanel.
Kantar says worldwide online sales of FMCGs—the kinds of low-cost products typically sold in places like grocery stores, drug stores and convenience stores—grew by 20.3% in 2018 and now represent 5.1% of grocery sales worldwide. By 2025, Kantar expects the global market share of online FMCG sales to roughly double by 2025, reaching 10% of the total market.
At 35.9%, the United States had the fastest ecommerce FMCG sales growth, followed by mainland China, where sales grew by 32.3%. Together, the U.S. and Chinese markets represented 84.0% of the worldwide increase in online FMCG sales, Kantar says. Other markets showing robust growth included Taiwan (31.9%), Italy (26.3%) and South Korea (14.0%).
These findings come from Kantar, market research firms GfK SE and Intage data for the 12 months ending December 2018. The research tracks 428,000 households in 46 countries.
The continued fast growth in South Korea is notable because that country’s FMCG market has the highest online penetration anywhere in the world. South Koreans now make more than 19.0% of their FMCG purchases online, Kantar says. By contrast, Kantar says online FMCG sales in the United States represent just 4.4% of the total (online and offline) FMCG market, giving online sales a lot more room to grow.
Kantar does not expect South Korea to maintain its lead in online FMCG market penetration much longer. Between 2018 and 2025, Kantar expects the online share of FMCG sales in mainland China will reach 31.0%, compared with 24% in South Korea. Meanwhile, online penetration in the U.S. FMCG market will grow to 12.0%, Kantar projects.
Winning retailers
For the U.S. and mainland Chinese markets, Kantar attributed growth in those sectors primarily to U.S.-based Amazon.com Inc. (No. 1 in the Internet Retailer 2019 Top 1000) and Walmart Inc. (No. 3), along with Chinese ecommerce giants Alibaba and JD.com.
While Walmart’s strong online performance contributed to online FMCG sales growth in the United States, Amazon remains dominant, representing 53.0% of U.S. online FMCG sales in 2018. In total, pure-play online retailers—Amazon and others that sell primarily online—have a 60.0% share of the U.S. online FMCG market, Kantar says.
Worldwide, FMCG sales of pure-play online retailers grew 29.0% in 2018 and represented 71.8% of online FMCG sales in 2018, Kantar says. Online FMCG sales of the pure-play online retailers—those that operate stores as well as commerce channels—grew their online FMCG sales by only 3.0% and hold a 28.2% share of the market, according to the Kantar data.
However, the dominance of pure-play retailers is not consistent across all countries or all product categories. For example, traditional retailers hold most of the online FMCG market in Austria, Germany, Russia, Spain and the United Kingdom, Kantar says. Likewise, Amazon’s share of the online FMCG market is just 8.8% in France, 5.0% in Germany, 3.2% in Spain and 1.0% in the United Kingdom.
“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,” says Eric Batty, global ecommerce business development director at Kantar Worldpanel. “In France, for instance, while Amazon is the online leader in personal care, for food and drinks it ranks only seventh. There, traditional bricks-and-mortar retailers have found success through click-and-collect, with the likes of [retail chain] E.Leclerc, which is 20 times bigger than Amazon for online food sales thanks to its DRIVE pick-up points.”
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