Home Food E-commerce to contribute 11 pc of FMCG sales by 2030: Nielsen

E-commerce to contribute 11 pc of FMCG sales by 2030: Nielsen

By  
SHARE

E-commerce’s contribution to the total sales is expected to be 11 percent by 2030, according to market research firm .

E-commerce to contribute 11 pc of FMCG sales by 2030: Nielsen
E-commerce contributed 0.4 percent to FMCG sales in 2016 and in 2018 it is expected to be around 1.3 percent of the branded packaged FMCG sales

E-commerce contributed 0.4 percent to FMCG sales in 2016 and in 2018 it is expected to be around 1.3 percent of the branded packaged FMCG sales, PTI reported.

“Over the next 12 years, we expect e-commerce itself to be 11 percent of FMCG sales, an 8X growth from its current size, , Executive Director – Retail Measurement Services, South Asia, Nielsen (India) was quoted by PTI as saying.

E-commerce is around 10 percent of modern trade, while modern trade at present is 10 percent of FMCG sales.

“E-commerce channel contribution to India FMCG sales now stands at over 1 percent and has grown at over 101 percent since last year. In specific product categories and markets the contribution is already touching double digits of total category value sales,” he was further quoted by PTI as saying.

He added that in categories like diaper there has been an upsurge in e-commerce from 4 percent to 9 percent 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 percent while modern trade at 23 per cent.

The growth in modern trade has been classified as 18 percent 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 percent 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 percent 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 percent growth in the third quarter. Rural consumption is growing at a faster pace than urban with an index of 1.4X.

The market research firm also noted that the FMCG companies in the top 50 contributed 60 percent in value terms, however the smaller manufacturers are driving the growth.

It noted that companies in the bracket of top 101 to 300 contributed 11 percent in terms of value however their growth was 12.8 percent and in terms of the tail-end companies beyond the top 300, the contribution was 21 percent while the growth was 18.5 percent.

Regional players are growing at a faster clip at 27.7 percent compared to national players at 11.7 percent.

The presence of regional players is predominantly in packaged food categories where they clocked 31 percent growth in September 2018 on year. This was nearly 3X times growth witnessed among national players.

However for the last quarter of 2018, it expects the growth in FMCG to come down to 12-13 percent.