Study recommends retailers embrace online sales

Online sales of fast moving consumer goods will rise 47 percent in the next two years worldwide to reach US$53 billion by 2016, suggesting retailers should embrace online channels instead of avoiding them, a study found.

Online purchases are estimated to account for 5.2 percent of global fast moving consumer goods sales by 2016, up from the current 3.7 percent, consumer research firm Kantar Worldpanel said in a report yesterday.

In China, online transactions make up 1.9 percent of total spending on fast moving consumer goods and that figure is expected to rise to 3.3 percent in 2016.

The study covered 100,000 shoppers in 10 markets including China, South Korea, France and the UK.

"All countries are witnessing fast growth although online only makes up a small share of FMCG sales at the moment, and retailers should adopt an online channel, otherwise they face significant damage to sales and market share," said Jason Yu, general manager at Kantar Worldpanel China.

One of the biggest misconceptions among retailers is they fear an online presence will curb sales in physical stores and consumers will be less loyal, but Kantar Worldpanel's study suggested having an online option boosts revenue and increases spending in offline stores.