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E-commerce gives wings to FMCG: 7 times more sales growth on Amazon, others than kirana stores

Prachi Gupta
online, amazon, online sales, flipkart, e-commerce

Online shopping continues to rule FMCG sales and compared to offline sales via kirana stores, malls and other stores, people bought more fast-moving consumer goods on Amazon and other e-tailers. "In the year ending 30 June 2019, global FMCG online sales grew seven times faster than total FMCG sales on average," Kantar Worldpanel said in a recent report. The report also said that by 2025, online grocery sales will double, i.e 10% of global FMCG sales will happen online. "The continued demand for convenience in urban areas, the integration between online and offline, the creation of new direct-to-consumer options and more technology will all help reach new targets beyond the current profile of affluent families with children," Stephane Roger, global shopper and retail director at Worldpanel Division, Kantar, said. 

In India, one in every two items bought via online shopping platforms such as Amazon and Flipkart belongs to fast-moving consumer goods such as cosmetics, food and beverages, skincare and other categories. FMCG products remain the most sold items on e-commerce platforms by volume. The highest volume of orders are for FMCG at 56%, information, data and measurement firm Nielsen had earlier said in a report. In terms of value, FMCG sales contribute about 11% of e-commerce sales.

"E-commerce has seen a transformative journey and is now a $1.2 billion industry growing from 0.5% contribution in 2016 to a 2% contribution in 2019, and slated to be 5% 2022 — this is in half the time that brick and mortar retail took to evolve," Sharang Pant, Head-Retail Measurement Services and Retailer Vertical, South Asia, Nielsen Global Connect, said earlier. However, the increase in online shoping will eventually tak a toll on offline trade such as kirana stores. The online shopping growth will contract  in the share of traditional trade from 89% in 2019 to 85% in 2022. But, modern trade or organised retail will go up by 1% to contribute a total of 10%.