Online shopping has changed consumer habits
The Nielsen report tilted ‘what next in ecommerce’ focuses on understanding the omnichannel customers 2017, finds out the details about online shopping habits of the online customers. E-commerce represents, at best, roughly 10% of the total $28 trillion global retail market which is growing rapidly and contributing significantly to growth. Global FMCG retail (online & offline) is pegged at $4 trillion today, growing at a rate of just 4%, with signs of continuing sluggish performance in developed markets. On the other hand, total retail e-commerce is predicted to grow by 20% CAGR to become a $4 trillion market by 2022. In dollar terms, this is an additional $2.1 trillion over the next 4 years, compared to $0.7 trillion across the FMCG segment.
This growth outlook begs the question, are brands and retailers treating e-commerce as a bigger growth opportunity than the whole FMCG industry itself? Relative to sectors like apparel and electronics, it is still early days in the evolution of e-commerce for most FMCG categories. The grocery category is even earlier along the chain of evolution. Even in some of the most developed markets, like the U.S., there is significant growth of online channels. While 23% of Americans are buying groceries online today, that’s expected to more than triple in less than 10 years. The prospect of the online retail industry equaling the FMCG industry in size globally represents a massive shift in consumer habits from the perspective of manufacturers and retailers.