In Online We Trust
The Growth Of E-Commerce In the Pacific
Consumer trust is crucial for e-commerce growth. Trust includes many aspects for shoppers to feel comfortable in selecting the crucial “add to basket” button. For example, shoppers need to be sure they are purchasing genuine products, that what they purchased will arrive safely on time and in good condition, and that the payment is secure.
And trust is growing in the Pacific with Australians spending $17 billion and New Zealanders spending $10 billion in total e-commerce sales in 2018. Whilst this is relatively small when compared to the 2018 total retail sales (Australia $311 billion, New Zealand $96 billion), e-commerce sales have increased compared to 2017 (4% in Australia and 9% in New Zealand).
The Nielsen Connected Commerce Survey reports that Pacific e-commerce growth has so far favoured categories across travel, books/music/stationery, events and fashion, as seen in the chart below. U.S. e-commerce growth has followed a similar trend.
However, these four key categories are causing a “snowball effect” for online FMCG success. When comparing Q2 2018 vs Q2 2017, fresh grocery, packaged grocery, household cleaning, wine and alcoholic beverages and pet food and supplies have all seen an increase in preference for online only purchases or a combination of online and in-store purchases for Australia and New Zealand.
Although shoppers lean towards in-store as a default, retailers and manufacturers should consider an omni-channel strategy to grow their sales. FMCG online growth varies hugely across markets. The below chart, provides context for Pacific preferences to purchase compared to China, Korea (who have strong e-commerce penetration) and the U.S. (who the Pacific markets are following in growing e-commerce penetration).
Learning from the success of markets around us is crucial to continue to drive e-commerce growth in the Pacific. Compared to offline, buying online requires a higher level of trust with shoppers. When building online strategies, set yourself apart from your competitors by addressing concerns around genuine products, delivery times, condition of goods (especially in fresh and frozen), and safe banking options.
ABOUT THE NIELSEN CONNECTED COMMERCE SURVEY
The Nielsen Connected Commerce report provides an understanding of the global connected consumer, shopping traits, category evolution and barriers to identify future growth prospects. It identities the top online categories and changes in category penetration, along with online purchasing behaviour and consumers’ expectations from an online shopping experience. The insights will assist FMCG companies in formulating strategies to enhance consumers shopping experiences in the digital world.