FMCG consumption via online shopping to touch USD 45 billion by 2020: Report

BENGALURU: The country is looking at a digitally driven FMCG business opportunity of $45 billion by 2020. The digital advertising spend by FMCG companies is also expected to touch 30 percent over the next three years from 10 percent at present, a study by Google India and BCG has found.

The report titled ‘Decoding Digital Impact: A $45B Opportunity in FMCG 2020’ finds that the digital technology will drive FMCG business in India in the coming years. It is expected that there will be at least 650 million internet users by 2020, with a high growth of mobile penetration from non-metro cities as well.

Further,  the online purchasers of FMCG products spend twice that of their offline counterparts, the report states. “India’s 28 million affluent households will contribute to 40 percent of overall online FMCG consumption by 2020, of which 60-65 percent will be digitally  influenced.”

Also, the e-commerce segment within FMCG is expected to grow to become a $6-billion market in 2020. Those living in metros are concerned about the availability of options and consumers in smaller cities are more concerned about express delivery and easy returns, the report added.

According to Abheek Singhi, senior partner and Asia-Pacific head of consumer practice at BCG, digital influence is no longer something in the distant future. “The urban Indian consumer spends more time online than on print and TV. In FMCG, 40 percent of spending will be influenced digitally by 2020 and this will be driven by video, vernacular and views and opinions.”

Vikas Agnihotri, industry director, Google India, added: “FMCG was considered the last bastion for digital adoption but not anymore. It is growing rapidly and much faster than the industry imagined.”