E-commerce Builds New Bridges to Drive 5.3% CAGR in the FMCG Market

E-commerce Builds New Bridges to Drive 5.3% CAGR in the FMCG Market

Global FMCG (Fast-Moving Consumer Goods) Market will likely grow at 5.3% CAGR during 2020-2025, as e-commerce builds new consumer base with diverse product offerings, and convenience. The looming covid-19 pandemic will also boost distribution channels like e-commerce with valuation of the market likely to jump from $10,070 bn in 2018 to $15,327 bn in 2025.  FMCG market remains a bright spot in the global economy amidst the pandemic, as recognised brand outperformed generic products, despite challenges like fall in incomes.

Growth of Healthcare Products, and Household Items Remains Key 

The expansion in e-commerce, and subsequent choices to consumer have played a major role in driving growth in the FMCG Market. Today, consumers have the power to purchase ordinary items from around the world through e-commerce. Moreover, the choices aren’t merely a hogwash. Quite the contrary, research shows that choices in FMCG sector often lead to discovery of quality products, more choices, economic options, among other benefits for consumers. Moreover, growth in marketing tools like social media have also led to growth in low-cost marketing channels. This has resulted in major reductions in cost, and opened up doors for influencer-driven marketing, and healthy curiosity of personal care products among women. Moreover, tools like social media marketing has also opened up tracking mechanisms for understanding consumer behaviour on a whole new level. Earlier, tracking consumers in rural areas, and understanding their preferences often remained a tricky task. However, today R&D for new brands, product launches, and expansion in remote corners of the world is a much easier task than ever before. Despite the promising growth of e-commerce, growing consumer base, and new opportunities like social media, the largely consolidated landscape of the FMCG sector will pose a challenge to growth. Arenas like personal care still remain major opportunities for small players in the FMCG market in the near future.

Food and Beverage Segment Will Likely Conquer the Largest Share of Revenues 

The food and beverage segment accounted for nearly 90% of the share in the FMCG market. Moreover, the segment continues to find new opportunities, despite major changes in consumer preferences across the globe. Major chains like KFC are forced to think about organic, and vegan delicacies, as conventional options like red meat come increasingly come under the radar of an ever-growing health conscious population. Moreover, the health segment accounted for nearly 5% market share in 2019. The segment will likely grow as personalized care, 3D printing, and government programs like MEDICAID promise to grow in key regions like the US. Thanks to the rising interest, and investment in 3D printing, the segment will likely register fastest growth in the 2020-2025 period.  Furthermore, the personal care segment in the FMCG market will grow at nearly 7.0%, thanks to rising efficacy of social media marketing strategies like influencer marketing. Big brands like L’Oréal have jumped the bandwagon to bring social media influencers on-board. This is a potentially a game-changer in the FMCG market as this will likely change cost-structures, and bring about a major change in branding, and strategy.   

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