Mumbai,NOV 14:
E-commerce’s contribution to the total FMCG sales is expected to be 11 per cent by 2030, according to market research firm Nielsen. E-commerce contributed 0.4 per cent to FMCG sales in 2016 and in 2018 it is expected to be around 1.3 per cent of the branded packaged FMCG sales.
“Over the next 12 years, we expect e-commerce itself to be 11 per cent of FMCG sales, an 8X growth from its current size, Sameer Shukla, executive director, retail measurement services, South Asia, Nielsen (India), told reporters here. E-commerce is around 10 per cent of modern trade, while modern trade at present is 10 per cent of FMCG sales.
“E-commerce channel contribution to India FMCG sales now stands at over 1 per cent and has grown at over 101 per cent since last year. In specific product categories and markets the contribution is already touching double digits of total category value sales,” he said.
He added that in categories like diaper there has been an upsurge in e-commerce from 4 per cent to 9 per cent since July 2016 to September 2018.Modern trade itself has seen a growth over the last few years from growing at one-third of traditional trade in 2015 to 2X at present. From the third quarter in 2016 to third quarter of 2018, traditional trade grew at 2 per cent while modern trade at 23 per cent.
The growth in modern trade has been classified as 18 per cent from metros, 32 to percent from 5-10 lakh towns, 33 per cent from 1-5 lakh towns and 58 percent from less than 1 lakh towns.
Nielsen also noted that salary weeks witness 15-20 per cent higher sales compared to regular weeks in a given month and the tactical play adopted by modern trade retailers around big days or weeks (Republic Day, Independence Day, Diwali etc) is an essential ingredient for success in the fast growing modern trade channel.
In the third quarter of calendar year 2018, FMCG had a growth of 16 per cent largely led by volumes, with 81 per cent share or 13 percentage points and the remaining 3 percentage points from price changes. It also noted that north and east have contributed to the 16 per cent growth in the third quarter. Rural consumption is growing at a faster pace than urban with an index of 1.4X.
