$ 5Bn worth of FMCG products will be sold online, seeing 50 times the growth from current level
Male Grooming products, Infant care and beauty products will see maximum impact
These findings were derived by studying various factors including research conducted for Bain and Google by Millward Brown byselecting a sample of an evolved 1600 Internet users (male and female) from across 13 cities in India including metros and non-metros – across eight FMCG categories – Skin care, hair care, oral care, home care, infant care, male grooming, beverages and food.
Findings from the study revealed that 35% men and 22% women are strongly influenced by digital for their purchases. Internet influence differed by category of products, with maximum influence on purchase decisions noticed in male grooming (39%), Skin care (26%), infant care products (24%) and hair care (24%) products.
Speaking about the key findings of the report, VikasAgnihotri, Industry Director, Google India said, “By studying the behavior of the lead consumers from an FMCG standpoint, it is clear that FMCG companies in India need to start thinking of digital as a more strategic medium and chart out a digital growth path for their products. In terms of key target audience from FMCG perspective as made clear in the report, 200 million digital natives will be online, 30 percent of women population in India will be online by 2020 reaching 200 million and 100 million women will shop online. 200 million plus users will be from rural India, whose disposable income will continue to grow. With these three key consumer segments moving to digital and spending more time online, FMCG companies will need to prepare themselves for this digital future.”
The findings also revealed high propensity amongst consumers to shop online for FMCG products – amongst the respondents who shop online – 50% users had bought a FMCG product online within the past 3 months. Amongst non-buyers – 40% women said they are likely to purchase FMCG product online in next 12 months; the percentage was higher for women from non-metros (45%). 60% men said they are likely to purchase Male Grooming product online in next 12 months. In terms of top activities done online before purchasing a FMCG product, respondents said they look for Product Information, Reviews & Recommendations and Price comparison.
Speaking about the current engagement levels of FMCG companies with the digital medium, Nikhil Prasad Ojha, Partner, Bain & Co., said, “Most FMCG companies in India have underestimated the impact of Internet and are struggling to ascertain a clear digital roadmap for their products. Companies need to uncover the digital potential for different categories, and align their growth trajectory with the changing consumer behavior. This report will serve as a useful reference point to start thinking and engaging consumers.”
The findings of the research were also consistent with the behavior reflected in terms of search queries on Google search in India. FMCG product search queries were next to apparels category in terms of year on year growth rate – Beauty, Food and Infant care queries were growing at 75%, 57% and 55% respectively year on year, way ahead of popular categories like Art & Entertainment, Travel & Tourism. While Food was the number 1 searched FMCG category in terms of search query volume, Beauty is the 2nd largest. Interestingly searches for buying beauty products online are growing at over 100% year on year.