FMCG e-commerce to grow at 44% CAGR to $4 bn by 2022: Nielsen India
Nielsen India expects the fast-moving consumer goods (FMCG) sales coming from the E-Commerce channel to grow to $4 billion by 2022. The channel contributes 2 per cent to the current FMCG market. These are insights from Nielsen’s recently launched E-Trak Index - a measurement solution that tracks the FMCG E-Comm industry.
India's first such solution is created using aggregated ePOS (electronic point of sale) data from cooperating E-commerce players and data science backed estimation for non-cooperating E-commerce players in India. The index adds a crucial element to the Retail Measurement Services that Nielsen provides by adding a view of the FMCG E-Comm space for All India Metros currently - with monthly read for Total FMCG, Super-categories, Category level for about 20 categories and for 11 categories at a top manufacturer level. Manufacturers and marketers get data, information and insights that can be further used to hone their E-Comm channel sales strategy to help shape a smarter market.
Announcing the launch of E-Trak, Prasun Basu, South Asia Zone President, Nielsen Global Connect, said, “Measurement is necessary. Measurement is difficult. Best possible measurement.” Explaining this further, he added, “Data and insights from Nielsen’s Retail Measurement Services continue to provide an essential foundation for manufacturers and marketers to understand their market. 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. To give a truly complete picture of the changing marketplace, we are happy to announce that Nielsen India has launched a specific E-Trak index that will now measure FMCG consumer offtake in the E-Comm space - marrying this with trends seen in modern and traditional trade to get a read on omnichannel in the country.”
According to Sharang Pant, Head-Retail Measurement Services and Retailer Vertical, South Asia, Nielsen Global Connect, “While the foundation is taking shape, E-comm’s dynamic nature has made it a disruptor in the marketplace. E-Comm has seen a transformative journey and is now a $1.2 billion industry, growing from 0.5 per cent contribution in 2016 to a 2 per cent contribution in 2019, and slated to be 5 per cent in 2022 - this is in half the time that brick and mortar retail took to evolve. That said, these channels are not cannibalising each other, and all continue to grow with E-Comm outpacing modern trade and traditional trade. The view that Nielsen presents on understanding channel, category and consumer trends will directly help players understand the right strategy in terms of assortment, pricing and positioning to win with the evolving consumer.”
Nitya Bhalla, Head - Data Science, South Asia, Nielsen Global Connect, added here, “Given the significance of the channel from both a current as well as future perspective, Nielsen has built a unique state of the art hybrid model for estimating this dynamic and growing channel. The methodology involves leveraging data from key collaborating E-tailers in the FMCG space. We then use crowd sourced data coupled with machine learning techniques from a panel of 200K+ consumers to estimate the E-Commerce sales for FMCG products.”
Metros lead the E-Comm FMCG race, with a 6 per cent contribution from the channel to total FMCG sales. Amongst these, Foods is the biggest contributor with 44 per cent; then it is Personal Care (40 per cent) and Household Care (13 per cent). Narrowing in on the value contribution of E-Comm to Metro sales categories with the channel, Diapers contribute 26 per cent to the sales; followed by Skin Creams (12 per cent) and Shampoo (10 per cent).