E-commerce growth rates have slowed from historic pandemic-related highs, meaning it is no longer a rising tide for all categories and brands. While vast potential exists, with e-commerce expected to account for half of retail’s growth over the next five years, retailers and brands need to get savvier as they search for new online opportunities. This briefing explores opportunities and challenges across four key areas: beauty and personal care, consumer health, food and soft drinks.
This report comes in PPT.
Beauty and personal care stands out as having the third highest e-commerce penetration rate among fast-moving consumer goods. Brands that have not yet leveraged a degree of personalisation online or mobile devices risk losing share in this space, since personalisation helps overcome uncertainties in product trial.
While the online market for consumer health continues to benefit from wider development of the e-commerce channel, local regulations still play a significant role in determining industry penetration by country. The markets with looser restrictions on the sale and delivery of health products will continue to lead the global marketplace over the near term.
Consumers remain hyper vigilant for good deals and ways to push their shopping bills back towards the halcyon days of 2019 prices. Online food retail, which offers opportunities to reduce spending on food, will triumph in this pricing environment.
Although e-commerce represents only a fraction of total soft drinks sales volume, the channel has performed strongly, despite significant cost-of-living challenges. Higher pricing and optimised price-pack architecture have been particularly prominent for online products. Premium categories, like sports and energy drinks, have also thrived with their online-friendly powder mix format.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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