Market Summary

The global e-commerce market forFMCG market was valued at USD 3.25 trillion in 2021 and it is predicted to rise at a compound annual growth rate (CAGR) of 7.46 % from 2022 to 2030. With the introduction of SaaS-based e-commerce software, the subscription models of businesses have seen a boom which has resulted in the adoption of e-commerce and its usage in small and medium enterprises. Enterprise owners are offering online delivery as well as pick-up options, making the setting an omni-channel platform. Leading retailers using this type of platform are Flipkart, Amazon, and Walmart.

The fast-moving consumer goods industry deals with products that are cheaper to produce and buy and are essential for the end-users. The recent years have witnessed an upward trend in e-commerce platforms integrating with the FMCG sector. It is mostly facilitated by consumer behaviour change, internet penetration, fast urbanization, and increased disposable income.

“Subscription-based Models and Availability of Multiple Vendors Globally Fuels the Market”

The shopping patterns of consumers are changing by the day. Due to the ease of access to a plethora of products, digitization of the market and availability of the internet, the end-users are observing a paradigm shift from traditional retail stores and shops-based purchasing of FMCG products to e-commerce-based methods which provide the customers subscription-based models and multiple product options. This market thrives on a huge amount of data generated by the use of devices connected by IoT, which can be gathered, analyzed and interpreted to maximize the consumer engagement towards such platforms. Big data is also beneficial to create effective and tailored marketing strategies targeted toward customer specificity. The COVID-19 disruption has slowed down the pace of the market due to supply chain commotions, but adaptability has increased due to lockdowns and online penetration.

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SEGMENT OUTLOOK:

The global E-commerce market for FMCG market is segmented based on type and platform.

By Type:

Based on type, the e-commerce market for FMCG market is segmented into food & beverage, personal care, health care, home care and others. The food & beverage type of FMCG products have dominated the market when it comes to sales through e-commerce channels. The growth of the food & beverage market is impressive, however, it is far slower than the 99.0% surge the category saw in 2020, when wary consumers pivoted to buying online at the onset of the pandemic. However, quick processing and delivery are critical and have traditionally been a challenge for retailers trying to take advantage of the immense ecommerce opportunity.

The right e-commerce strategy, technology, and logistics solutions for food and beverage retailers of all types and sizes hold the ability to gain a higher market share and even dominate this sector. Some of the examples of e-commerce channels for food & beverage include, click and collect by Walmart+ which lets the consumer to purchase the goods through the online forum and go to the physical stores for a pick-up; retail grocery delivery by Amazon which enables the customers to buy groceries from whole foods through Amazon.com with subscribe & save for scheduled auto-deliveries, also Amazon Fresh for same-day delivery and Prime Now from local whole foods locations only, and free for Prime subscribers.

The rest of the types, mainly personal and health care have seen consumer interest skyrocketed at the height of the pandemic in 2020. Global user penetration in the health and personal care market (including hair care, shower & bath, oral care, deodorants, and shaving) is expected to surge to 32.8% by 2024, according to a McKinsey survey. Ecommerce personal care saw record growth last year due to the pandemic, seeing 6% growth as part of all ecommerce sales. That may not seem like much, but that’s almost 3x the growth seen the year before. The year before that, this category saw just 3.5% growth.

By Platform:

Based on the platform, the e-commerce market for the FMCG market is segmented into web-based and mobile applications. The digital touchpoints for the consumer play a vital role in the e-commerce market for the FMCG sector. The end-users want a similar experience as the physical stores brought about on the websites and mobile applications. Also, these particular types enable the provision of tailored experiences to the customers which is a very strong driver in the market.

Future businesses have seen a rapid adaptation of these websites and mobile apps by retailers and enterprises. The COVID-19 pandemic has further accelerated this shift. Businesses use tools and technologies such as CRM and IoT-enabled devices to gather data on customer interaction with the brand across multiple touchpoints. This allows them to offer customized experiences using AI, augmented reality/virtual reality, etc., in the physical and digital environments.

As working from home has become the new normal, businesses are using digital interventions, such as remote selling/video calling to connect with consumers by setting up websites and mobile applications. This will also help re-evaluate priority customers and cater to the shift in focus from urban to rural on account of rapid reverse migration. Remote selling consists of an end-to-end sales cycle starting from creating awareness to providing after-sales service. Given the pandemic, brands are expected to continue to explore this option to provide a better customer experience and supplement sales.

By Regional Outlook:

Based on geography, the e-commerce market for FMCG market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

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In 2020, The North America e-commerce retail market is anticipated to grow at a substantial CAGR during the forecast period. The triangular continent, North America, gives strength to the global economy besides having only 5% of the global population. The e-commerce retail market is one of them which is enjoying huge growth in the North American region. According to an estimate by the US Census Bureau, the total sales of e-commerce retail in North America increased by 7.8% in the first quarter of 2021 as compared with the first quarter of 2020 and reached USD 1,581.4 billion. The discounted rates of products are attracting customers to choose them over in-store purchases. Amazon occupies the major market share, although its share has been reduced recently due to increased direct brand sales. Fashion product sales contribute more to the market which includes apparel and footwear.

In 2021, FMCG statistics for Europe look better when looking at the share of FMCG in total e-commerce. This equates to sales of USD 5.4 billion, making FMCG the fastest-growing category in German e-commerce. In other European countries, too, fast-moving products are one of the fastest-growing categories in online retailing. This can be explained by the fact that the other categories previously grew rapidly and FMCG has some catching up to do here. One reason for the still relatively weak demand for FMCG online in Europe is the deep-seated habit of consumers, who buy everyday items spontaneously without much planning. A limitation of purchasing such products online is the lack of the possibility to check the freshness of the products before purchasing.

Asia Pacific FMCG bounced back with 4.3% growth vs a relatively flat 2020. Through our retail measurement tracking, we see that 9 out of 14 markets are showing growth compared to 2019 (pre-covid), including the Chinese mainland, India, Singapore, South Korea, Indonesia, Taiwan, Australia, and New Zealand. Markets such as Myanmar, Hong Kong, Thailand, and Vietnam are still declining due to varying internal and external factors though are showing signs of recovery in Q4 2021.

By Key Competitors and Market Share Analysis:

As a result, leading firms are focused on maintaining long-term operations and developing manufacturing and distribution capabilities to increase their market position. The competition among the players is based on numerous parameters including quality, innovation, product offerings, price, and corporate reputation.

Recent Developments:

• Shopify to Acquire Deliverr for $2.1B: Building the Future of Global Logistics for Independent BrandsIn February 2020, Permobil signed an agreement to acquire Supported B.V. to fasten its production process and strengthen its seating and positioning footprint in the EMEA region.
• Shopify Merchants Support Largest Workforce in the World, Contributing 5M Jobs and $444B+ in Economic Activity in 2021

The following are some of the major market players operating across the globe:

• Shopify, Inc.
• SAP SE
• Oracle Corporation
• Magento Commerce (Adobe)
• Salesforce.com, Inc.
• Apttus
• Intershop Communications AG
• BigCommerce
• WooCommerce
• Sitecore
• Episerver
• Kentico Software
• Unilog Content Solutions Pvt. Ltd.
   

 
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