Sales of fast moving consumer goods (FMCG) from the eCommerce channel, which presently contributes 2% to the current FMCG market, is set to grow at a compounded annual growth rate (CAGR) of 44% to $4 billion by 2022, says an E-Trak Index launched recently by Nielsen India. The new introduced index has been created using aggregated ePOS (electronic point of sale) data from cooperating eCommerce players and data science backed estimation for non-cooperating eCommerce players in India.
Prasun Basu, South Asia Zone President, Nielsen Global Connect, said, “In this rapidly evolving world of commerce, India’s FMCG industry is now making its presence felt in the eComm channel - appealing to consumers’ need for convenience, and in sync with increasing smartphone and internet penetration. The E-Trak index is aimed at giving a truly complete picture of the changing marketplace. The index will measure FMCG consumer offtake in the eComm space while marrying this with trends seen in modern and traditional trade to get a read on omni-channel in the country,” he said.
The E-Trak Index is a unique measurement solution that tracks the FMCG eComm industry in India. As per a company statement, the index adds a crucial element to the retail measurement services that Nielsen provides by adding a view of the FMCG eComm space for all India metros. The data comprises 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 eComm channel sales strategy to help shape a smarter market.
“While the foundation is taking shape, eComm’s dynamic nature has made it a disruptor in the marketplace,” said Sharang Pant, head-retail measurement services and retailer vertical - South Asia, Nielsen Global Connect. eComm has seen a transformative journey and is now a $1.2 billion industry growing from 0.5% contribution in 2016 to a 2% contribution in 2019. It is now slated to be 5% in 2022.
According to Pant, this is in half the time that brick and mortar retail took to evolve. “That said, these channels are not cannibalising each other and all continue to grow with eComm 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,” he 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 etailers in the FMCG space. We then use crowd sourced data coupled with machine learning techniques from a panel of 200K+ consumers to estimate the eCcommerce sales for FMCG products,” said Nitya Bhalla, head - data science - South Asia, Nielsen Global Connect.
Insights from the E-Trak Index reveal that metros are leading the eComm FMCG race with a 6% contribution from the channel to total FMCG sales. Amongst these, foods is the biggest contributor with 44% followed byt personal care (40%) and household care (13%). Narrowing in on the value contribution of eComm to metro sales categories with the channel, diapers contribute 26% to the sales; followed by skin creams (12%) and shampoo (10%).
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)
Prasun Basu, South Asia Zone President, Nielsen Global Connect, said, “In this rapidly evolving world of commerce, India’s FMCG industry is now making its presence felt in the eComm channel - appealing to consumers’ need for convenience, and in sync with increasing smartphone and internet penetration. The E-Trak index is aimed at giving a truly complete picture of the changing marketplace. The index will measure FMCG consumer offtake in the eComm space while marrying this with trends seen in modern and traditional trade to get a read on omni-channel in the country,” he said.
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| Courtesy: Nielsen E-Trak Index |
The E-Trak Index is a unique measurement solution that tracks the FMCG eComm industry in India. As per a company statement, the index adds a crucial element to the retail measurement services that Nielsen provides by adding a view of the FMCG eComm space for all India metros. The data comprises 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 eComm channel sales strategy to help shape a smarter market.
“While the foundation is taking shape, eComm’s dynamic nature has made it a disruptor in the marketplace,” said Sharang Pant, head-retail measurement services and retailer vertical - South Asia, Nielsen Global Connect. eComm has seen a transformative journey and is now a $1.2 billion industry growing from 0.5% contribution in 2016 to a 2% contribution in 2019. It is now slated to be 5% in 2022.
According to Pant, this is in half the time that brick and mortar retail took to evolve. “That said, these channels are not cannibalising each other and all continue to grow with eComm 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,” he 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 etailers in the FMCG space. We then use crowd sourced data coupled with machine learning techniques from a panel of 200K+ consumers to estimate the eCcommerce sales for FMCG products,” said Nitya Bhalla, head - data science - South Asia, Nielsen Global Connect.
 |
| Courtesy: Nielsen E-Trak Index |
Insights from the E-Trak Index reveal that metros are leading the eComm FMCG race with a 6% contribution from the channel to total FMCG sales. Amongst these, foods is the biggest contributor with 44% followed byt personal care (40%) and household care (13%). Narrowing in on the value contribution of eComm to metro sales categories with the channel, diapers contribute 26% to the sales; followed by skin creams (12%) and shampoo (10%).
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)
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