Nielsen India bets big on FMCG E- Commerce growth in India

Expects FMCG e-commerce to grow at a 44% CAGR to $4 billion by 2022

Nielsen
India expects the fast-moving consumer goods sales coming from the E-Commerce
channel to grow to $4 billion by 2022. The channel contributes 2% to
the current FMCG market. These are insights from Nielsen’s recently launched
E-Trak Index – a measurement solution that tracks the FMCG E-Comm industry.

India’s
first such solution is created using aggregated ePOS (electronic point of sale)
data from cooperating E-commerce players and data science backed estimation for
non-cooperating E-commerce players in India. The index adds a crucial element
to the Retail Measurement Services that Nielsen provides by adding a view of
the FMCG E-Comm space for All India Metros currently – with monthly read for
Total FMCG, Super-categories, Category level for about 20 categories and for 11
categories at a top manufacturer level. 

Manufacturers
and marketers get data, information and insights that can be further used to
hone their E-Comm channel sales strategy to help shape a smarter market.

Announcing
the launch of E-Trak, Prasun Basu, South Asia Zone President, Nielsen Global
Connect, said, “Measurement is necessary. Measurement is difficult. Best
possible measurement.” Explaining this further he added “Data and insights from
Nielsen’s Retail Measurement Services continue to provide an essential
foundation for manufacturers and marketers to understand their market. In this
rapidly evolving world of commerce, India’s FMCG industry is now making its
presence felt in the E-Comm channel – appealing to consumers’ need for
convenience, and in sync with increasing smartphone and internet penetration.
To give a truly complete picture of the changing marketplace, we are happy to
announce that Nielsen India has launched a specific E-Trak index that will now
measure FMCG consumer offtake in the E-Comm space – marrying this with trends
seen in modern and traditional trade to get a read on omnichannel in the
country.”

Sharang
Pant, Head-Retail Measurement Services and Retailer Vertical, South Asia,
Nielsen Global Connect said “While the foundation is taking shape, E-comm’s
dynamic nature has made it a disruptor in the marketplace. E-Comm has seen a
transformative journey and is now a $1.2Bn Industry growing from 0.5%
contribution in 2016 to a 2% contribution in 2019, and slated to be 5% in 2022
– this is in half the time that brick and mortar retail took to evolve. That
said, these channels are not cannibalizing each other, and all continue to grow
with E-Comm outpacing modern trade and traditional trade. The view that Nielsen
presents on understanding channel, category and consumer trends will directly
help players understand the right strategy in terms of assortment, pricing and
positioning to win with the evolving consumer”

Nitya
Bhalla, Head- Data Science, South Asia, Nielsen Global Connect said “Given the
significance of the channel from both a current as well as future perspective,
Nielsen has built a unique state of the art hybrid model for estimating this
dynamic and growing channel. The methodology involves leveraging data from key
collaborating E-tailers in the FMCG space. We then use crowd sourced data
coupled with machine learning techniques from a panel of 200K+ consumers to
estimate the Ecommerce sales for FMCG products.”

Metros
lead the E-Comm FMCG race with a 6% contribution from the channel to total FMCG
sales. Amongst these, Foods is the biggest contributor with 44%; then it is
personal care (40%) and household care (13%). Narrowing in on the value
contribution of E-Comm to Metro sales categories with the channel, Diapers
contribute 26% to the sales; followed by skin creams (12%) and shampoo (10%).