FMCG firms to go aggressive on e-commerce as more consumers go online amid pandemic

Management at major FMCG companies in India now look to ramp up e-commerce operations as the coronavirus pandemic has marked a major shift in consumer shopping behaviour and more and more shopping is done online. The topmost management of certain FMCG companies which market research firm Nielsen spoke to said that there will be more focus on e-commerce going forward, while a majority of them said that there focus will be more on improving last-mile delivery in the coming six-months, Nielsen said in its 5th edition of COVID-19 — Evolving consumer trends — report on Friday.

In August 2020, e-commerce sales beat the sales of both traditional and modern sales individually. While traditional trade in August was 95% of the average of December 2019, January and February sales 2020 together, modern trade was 81% and e-commerce sales were 106& of December, January and February average. CXOs of various firms are confident now of e-commerce sales going ahead and 43% of the companies are now fully ready to adapt to e-commerce while 50% companies are somewhat ready. Companies have also started to witness an increase in full basket orders. “Full Baskets are orders with at least four different categories and total bill value more than Rs 900 in a month,” Nielsen said.

Further, Nielsen expects that the share of FMCG companies will increase if e-commerce booms further. “We will definitely see the share of FMCG companies go up if e-commerce goes up. CXOs have also said that they will increase e-commerce operations. Barriers on e-commerce are low. .. FMCG companies may boost their share of growth on e-commerce channels more than traditional baskets,” Diptanshu Ray, Lead, Retail Intelligence, South Asia, Nielsen Global Connect, told reporters at the virtual event. Moreover, Sameer Shukla, who is Executive Director, Retail Intelligence, South Asia, Nielsen Global Connect, added that the share of e-commerce is expected to go up in the coming times owing to the comfort and ease that online shopping brings. “It also depends on the kind of investment that e-commerce players bring,” he added.