On­line shop­ping has changed con­sumer habits

Customer Click - - RESEARCH NOTES - ECOMMERCE -

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.

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