Ecommerce to contribute 5% or $4 bn to FMCG sales by 2022: Nielsen

MUBMAI: Nielsen expect ecommerce to contribute about 5% to overall fast moving goods market, and treble sales to reach $4 billion sales by 2022. At present, online account for 2% of FMCG sales at $1.2 billion and while the market researcher anticipates all channels to grow, general trade contribution could shrink by 400 basis points, almost entirely taken by online sales.

"This is in half the time that brick and mortar retail took to evolve. That said, these channels are not cannibalizing each other, and all continue to grow with e-comm outpacing modern trade and traditional trade," said Sharang Pant, Head-Retail Measurement Services and Retailer Vertical, South Asia, Nielsen Global Connect said

Consumers are also buying more of higher-priced groceries online in metros now. For instance, one in four rupee spent on diapers is online while it controls 12% of skin cream spends. Within consumer basket, food accounts for 44% of online sales followed by personal care at 40%. Interestingly, the study shows that market leaders in toothpaste, utensil cleaners and packaged tea segments saw their share fall online during April-August compared to a year ago, indicating opportunity for challenger brands in the ecommerce space.

"In this rapidly evolving world of commerce, India’s FMCG industry is now making its presence felt in the e-comm channel - appealing to consumers’ need for convenience, and in sync with increasing smartphone and internet penetration," said Prasun Basu, South Asia Zone President, Nielsen Global Connect.

While India emulates contributions from developed markets like Canada, Scandinavia and Western Europe where online account for just 1-3% to sales, markets such as China and South Korea have a significantly higher ecommerce contribution of 17% and 20% each.