International

E-commerce grocery sales to add $257 billion in FMCG market

IT & Logistic

Digital technologies are revolutionising the way the food and consumer goods industry operates and online sales are forecast to grow 163% by 2023 across major markets, says IGD.

Posted on Jun 06 ,02:34

E-commerce grocery sales to add $257 billion in FMCG market

Major grocery e-commerce markets will continue to expand rapidly, growing at almost four times the rate of any other channel, according to a new report from IGD and The Consumer Goods Forum.
Asia and North America will lead the way on the rate of growth, with Europe set to develop this channel at a comparatively slower pace. According to the report, Asia-Pacific's online grocery market will grow by 196% by 2023, adding $198bn; North America's online grocery market will grow by 152% by 2023, adding $38bn; and Europe's online grocery market will grow by 66% by 2023, adding $21bn.
Grocery e-commerce sales in Asia-Pacific are set to triple over the five years, with IGD forecasting that in 2023, e-commerce's share of grocery in Asia (7.5%) will be twice that of North America (3.4%), and close to three times larger than Europe's (2.5%).
"We are living in exceptional times, with an extraordinary burst of retail innovation, driven largely by digital developments. With this research, we explore the global proliferation of retail innovation from three different directions: established players, online specialists and the new ecosystems. We believe that plenty of the new emerging models are set to grow and prosper, which means established retailers will need to work hard and swiftly, either to limit their impact or to emulate them.
The digitisation of the food and CPG industry has already disrupted and transformed the industry, yet the story has only just begun. To help businesses understand the opportunities and challenges that businesses face, we have identified three retail models that have developed as the food and CPG industry digitises and we project how these business models will evolve,", said Susan Barratt, CEO at IGD.
Three digital retail models of the future will emerge from the digitisation of the food and Consumer Packaged Goods (CPG) industry:
Rapid evolution


Businesses are transforming their established operations through digital technologies to enhance their stores, reduce costs and improve connection with customers.


IGD's predictions for rapid evolution include:

Technology-led strategic partnerships will accelerate rapidly. Technology companies will have a much stronger influence on CPG retailing;
Advanced digital technology will help physical stores close the data gap on pureplay operators;
The commercial trading interface between established retailers and suppliers will be transformed by AI;
The most advanced traditional retailers will diversify to become less reliant on selling products;
Retailers with the best data capabilities will win in the long term by becoming incrementally better every single day.


E-commerce 2.0


The first, mainly standardised wave of e-commerce is fragmenting in a variety of creative new ways to sell and add value.


IGD's predictions for E-commerce 2.0 include:

Successful pure-plays will diversify offline, either by opening their own stores or forming alliances with traditional retailers;
Manufacturer D2C businesses will become a major force and they could be consolidated through a single ordering platform;
Specialist retailers and marketplaces will proliferate;
Some logistics companies will evolve to become retailers;
Social commerce will go global, with platforms integrating with e-commerce to offer more frictionless shopping.


Ecosystems


A network of retail and consumer services is emerging, linked by logistics, financial services and technology.


IGD's predictions for Ecosystems include:

Ecosystem evolution will vary considerably by market;
More technology companies will evolve into ecosystems, with more major technology businesses broadening their capabilities and services;
Ecosystems will recruit a growing number of established businesses to get even closer to shoppers and the wide range of products and services they need and want;
New consumer services will be bolted onto ecosystems (e.g. healthcare, leisure, hotels etc.), connecting as many consumer touchpoints on the path to purchase as possible;
The centralisation of data and use of advanced technology means that ecosystems will gain real-time insights, promoting rapid change, driving greater personalisation for shoppers and raise profitability, a benchmark for all other retail models.

"While of course growth remains challenging for all of the established players in the industry, many are nevertheless finding that the ongoing disruption presents exciting opportunities. This report presents several ideas for consumer goods and retail companies looking to secure their long-term future, and we'll be discussing some of these themes at the Global Summit in Vancouver: how scale and agility can impact your business model, how digital technologies will permeate decisions and how new forms of collaboration will help drive the sustainable evolution of our industry," explained Peter Freedman, Managing Director of The Consumer Goods Forum.

 NEWSLETTER - Stay informed with the latest news!

Comments





Similar articles

China

Metro sells 80% of its Chinese operations to Wumart

Metro decided to sell 80% of its Chinese operations to local bidder Wumart, according to IGD Asia...


Read more Read more
International

For consumers, food has become a service

Seeking a broader experience in the food sector, European consumers, especially the millennials, ...


Read more Read more
UK

British consumer is ditching pork

Consumption of pork has declined in the UK during the summer months, according to a report from K...


Read more Read more
Websolutions by Angular Software and SpiderClass