While the appetite for buying groceries online is at high levels around the world—more than half of global respondents (55%) are willing to give it a try—digital natives are leading the charge. Who makes up this adventurous group? The consumers who grew up with digital technology, of course: Millennials and now Generation Z. These consumers have an unprecedented enthusiasm for—and comfort with—technology, and online shopping is a deeply ingrained behavior.
When looking at six e-commerce options (home delivery, in-store pickup, drive-through pickup, curbside pickup, virtual supermarket and automatic subscription), usage is greatest among the youngest respondents in Nielsen’s Global E-commerce and The New Retail Survey, and they’re the most willing to use these options in the future. For example, 30% of Millennials (ages 21-34) and 28% of Generation Z (ages 15-20) respondents say they order groceries online for home delivery, compared with 22% of Generation X (ages 35-49), 17% of Baby Boomers (ages 50-64) and 9% of Silent Generation (ages 65+) respondents.
“Millennials are at the beginning of their careers and are starting to form households, while the oldest members of Generation Z will soon be graduating college and joining the workforce,” said Patrick Dodd, president, global retailer vertical, Nielsen. “These generations will shape our economy for decades to come. Therefore, it’s critical that retailers and manufacturers understand how these consumers are using technology and include digital touch points along the entire path to purchase.”
Online shopping has no doubt seen a boost thanks to continued increases in mobile adoption and broadband penetration, particularly in developing regions. Comparatively, Asia-Pacific consistently exceeds the global average for adoption of online retailing options. Ordering online for home delivery is the most commonly preferred flexible retailing option in the region, with particularly high usage in China. More than one-third (37%) of Asia-Pacific respondents, and even more in China (46%), say they use an online ordering and delivery service. Adoption levels for online automatic subscriptions are also particularly high in this region (22% vs. 14% globally), with China once again leading the way (30%). Furthermore, the percentage of respondents who are willing to use digital retailing options in the future is highest in largely developing-market regions: Asia-Pacific (60% on average), Latin America (60%) and Africa/Middle East regions (59%), compared to Europe (45%) and North America (52%).
Sales data reflect the phenomenal online growth of fast-moving consumer goods (FMCG) purchases in China. Between 2013 and 2014, e-commerce sales increased 40% for 17 major Nielsen tracking categories. Food is the primary growth engine. For example, while e-commerce’s share of the liquid milk category is small (2%), it nearly doubled in size (+91%) between 2013 and 2014, leading the online growth of all FMCG categories. Chocolate is another food category that has performed particularly well online; in 2014, online chocolate sales contributed 17% of total category sales, with +59% year-over-year growth.
Why is online shopping for FMCG so prevalent in Asia-Pacific compared with the rest of the world? A few factors are at play. First, the region’s rapid urbanization and high population density make the home delivery model economically viable, particularly when coupled with low labor costs, as has been the case in China. In addition, booming smartphone ownership and usage have created huge mobile commerce opportunities. Finally, in China in particular, food safety concerns have driven consumers in search of high-quality goods online.
The report also discusses:
- The product categories best positioned for e-commerce success.
- The technology-based convenience options most used, both in-store and out.
- How the share of in-store retail trade channel differs by channel in developed & developing regions.
For more detail and insight, download Nielsen’s Global E-commerce and The New Retail Report.
About the Nielsen Global Survey
The findings in this survey are based on respondents with online access across 60 countries. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective only on the habits of existing Internet users, not total populations. In developing markets where online penetration has not reached majority potential, audiences may be younger and more affluent than the general population of that country. Additionally, survey responses are based on claimed behavior, rather than actual metered data.