40 pc FMCG consumption to be driven digitally by 2020: Report

With increasing digital influence, 40 percent of Fast Moving Consumer Goods (FMCG) consumption in India will be driven digitally, totalling to a value of USD 45 billion by 2020, says a report.

Besides, the share of digital advertising spends by FMCG companies is expected to reach 25-30 percent by 2020 as against 10 percent in 2016, a joint report by Google India and global consulting firm BCG said.

Stating that there will be 650 million Internet users by 2020 driven by increasing mobile penetration, the report said reinforcing digital in India is now a way to reach the masses and not just a small targeted opportunity.

“This mass reach makes it central for FMCG companies and will disproportionately influence categories such as baby care and beauty,” the report said.

The findings were based on research covering over 20,000 respondents, spread across metros, T1-T3 towns and multiple FMCG categories.

“FMCG was considered the last bastion for digital adoption but not anymore. It’s growing rapidly and much faster than the industry imagined,” Google India Industry Director Vikas Agnihotri said.

Considering the assortment, convenience and availability along with discounting, the report said the e-commerce segment within FMCG is expected to grow to become a USD 6 billion market in 2020.

“India’s 28 million affluent and elite households will contribute to 40 percent of overall online FMCG consumption by 2020, of which 60-65 percent will be digitally influenced,” it added.