E-commerce share in India's FMCG retail sales triples in 2 years: Nielsen

Growing consumer trust and confidence in online buying has helped e-commerce platforms expand their share in India's total FMCG retail sales by as much as three times, according to market researcher Nielsen.

This has led to online purchase of a broader range of categories, with a particularly interesting upswing seen in fresh and packaged groceries, Nielsen said in a report.

It further stated that global online grocery purchasing is up 15 per cent in the last two years, leading to an estimated $70 billion additional sales in online FMCG.

The 2018 Nielsen Connected Commerce Report said e-commerce categories -- travel (69 per cent), fashion (66 per cent), and IT and Mobile (63 per cent) continue to account for the largest proportion of online transactions in the country.

 

Interestingly, categories posting the most significant growth in e-commerce channel included packaged grocery (where 40 per cent of respondents said they made a purchase), fresh groceries, and baby and children products.

"From tracking the e-commerce evolution in pioneering countries like South Korea where online sales now account for a staggering 20 per cent of the total FMCG sector, we know that consumers follow a certain pattern of online shopping behaviour, Nielsen South Asia Executive Director (Retail Measurement Services) Sameer Shukla said.

Travel, fashion and IT/ Mobile products are typical categories for first-time online shoppers and as their familiarisation, comfort and trust levels increase, their category repertoire expands into areas like beauty, personal care and baby products, he added.

"... and then moves even wider afield to packaged and fresh grocery categories, and this is evidenced in the significant jump we've seen in online purchasing within grocery and food delivery in recent years," he said.

The report also revealed that consumers are more open to purchase packaged and fresh groceries online when they are offered certain purchasing options and quality assurances.

About 60 per cent of consumers pointed towards the need to offer and improve hassle-free refund, replacement experience as well as free cost delivery, which if offered, would boost their confidence to buy online with higher frequency.