SHANGHAI: Online shopping continues to grow in China, Taiwan and Korea, offering many opportunities for FMCG brands, but a new study advises brands to be aware that the market is becoming increasingly fragmented and sophisticated.
According to analysis from Kantar Worldpanel, the market insights company, FMCG ecommerce is now the third largest trade channel in Korea after hypermarkets and supermarkets, accounting for 9% market share in 2013.
Market share in mainland China and Taiwan stands at 1.8% and 3.2% respectively, but this is expected to grow significantly as new shoppers engage online.
Kantar found more than half of Korean households now shop online for FMCG goods while the proportion in Taiwan crossed the 35% mark for the first time in 2013.
The rate for major cities in China is also nearly 50% and – although total penetration for the country currently stands at only 28% – overall growth in both China and Taiwan is expected to surpass 50% in less than three years.
While ecommerce in the three countries looks set for further growth, the study also uncovered signs that the retail landscape is shifting, with online shoppers becoming increasingly fragmented.
Young families in China, for example, remain the ones with the strongest online profile, whereas older generations, especially the over 50s, are the fastest-growing users in Korea and Taiwan.
Online shoppers in advanced markets like Korea are also showing different preferences – for example, those aged 40-50 tend to use department store channels while a higher proportion of those in their twenties prefer branded shops.
Shoppers are increasingly turning to the internet for food shopping: biscuits and baby milk powder are among some of the fastest growing categories in China. Korea's fresh food online penetration almost reached 30% in 2013, which the report attributed to well-developed co-ordination with hypermarkets.
In other developments identified in the report, specialised shopping malls and individual online stores are gaining ground at the expense of traditional sites, such as Yahoo and eBay, leading Kantar to warn that the line between online and offline shopping will continue to blur.
It advised marketers to recognise online shoppers are becoming increasingly fragmented, so should enhance their digital capabilities and select the most appropriate online platform for their brand.
Data sourced from Kantar Worldpanel; additional content by Warc staff