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Indian FMCG sales move online

News, 13 February 2015

NEW DELHI: Within the next five years, up to 30% of sales in some FMCG categories in India will come through the online channel, a new study has predicted.

A joint report from internet giant Google and consulting firm Bain & Co was based on a survey of 1,600 internet users from across 13 cities and eight FMCG categories, including skin care, hair care, oral care, home care, infant care, male grooming, beverages and food.

This estimated that the internet would influence one third of all FMCG sales by 2020, as the online user base grows and as more people go online to research products.

Only around 0.3% of actual sales currently come via the online channel but this is set to increase to around 5%, or a value of $5bn, Exchange4Media reported.

Three categories, however, are expected to significantly outperform this average. In male grooming products, between 35% and 30% of purchases will take place online. Infant care products are not far behind on 20% to 25%, while in beauty products generally, the figure will be between 8% and 10%.

The higher figures for male grooming products are a reflection of the finding that men (35%) are more strongly influenced by digital than women (22%) in their purchases.

But internet influence also varies by category, being especially noticeable in male grooming (39%), skin care (26%), infant care (24%) and hair care (24%).

The study also highlighted the increased willingness of consumers to buy FMCG products online. Among those already shopping online, half said they had bought an FMCG product online within the past 3 months.

And among non-buyers, 40% of women said they were likely to purchase an FMCG product online in next 12 months, while 60% of men were likely to buy a male grooming product online.

"FMCG companies in India need to start thinking of digital as a more strategic medium and chart out a digital growth path for their products," observed Vikas Agnihotri, industry director at Google India.

Data sourced from Exchange4Media; additional content by Warc staff