More than 8% of global FMCG sales will be from online channels this year, according to research from Kantar, GfK, IRI and Intage.
The forecast expects online channels to take an 8.3% share of FMCG sales in 2021 given a partial lockdown and this rises to an 8.7% share under a full lockdown scenario. This is double the level in 2018 (4.2%) and up from 6.5% in 2020.
However, online's penetration of FMCG sales varies significantly across markets. It accounts for one quarter in Mainland China (25.0%) and South Korea (24.4%), followed by a double-digit share in Great Britain (11.4%) and Taiwan (11.4%). This compares to a less than 1% share in much of Latin America.
Online FMCG sales grew the most in markets where the channel is already well established – its share grew 6.4 percentage points (pp) in Mainland China, rose 3.3pp in South Korea and increased by 3.6pp in Great Britain.
Kantar adds that rising penetration helped drive this growth – 67m more households bought their grocery shopping online at least once in 2020. Part of this rise was driven by online shopping broadening its appeal. In Great Britain, online grocery penetration among retired households nearly doubled between 2019 and 2020, from 19.4% to 37.1%.
Additional research shows that it was the largest FMCG brands that grew last year, suggesting consumers turned to recognised products but purchased them in new ways.
Kantar says that the challenge for online FMCG brands is driving loyalty and winning share among lower spend trips. WARC's latest research into customer retention argues brands should tilt the balance of investment toward acquisition, but also understand that most tactics aimed at acquisition can work to retain customers.
However, brands will also need to integrate online and offline channels into a single customer experience, as 81% of consumers are omnichannel shoppers. New strategies, including in sustainability and subscription models, may also help brands grow this year.