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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
DRAFT10th February, 2015
$35BnDigitally influenced FMCG sales by 2020 (1/3rd of overall FMCG)
Infant Care, Beauty, Male GroomingDigital Pioneers of 2020
How to win?Winning strategy for Indian FMCGs
$5BnFMCG sold online by 2020 (50X growth)
250MnConsumers shopping online by 2020 (1/3rd of internet users)
Executive Summary
Consumers
Source: eMarketer; TRAI; IndiaStat; Euromontor
49% 25% 79% 53% 33% 58% 77% 79% 87%
Online Population (MM)
2014
658
300252
10884 83
50 395
China India US Brazil Indonesia Russia UK South Korea Norway
Internet
Penetration
Source: eMarketer; TRAI; IndiaStat; Euromontor; Morgan Stanley Research estimate
Screenagers Women Rural
By 2020
Indians will be online
650 Mn
*Screenagers: Born 1996-2005Source: comScore, United Nations (UN), Morgan Stanley Research estimate; Nielson Informate Smartphone Analytics Aug’14
Screenagers
*Screenagers: Born 1996-2005
Source: comScore, United Nations (UN), Morgan Stanley Research estimate; Nielson Informate Smartphone Analytics Aug’14
15-24
25-34
35-44
45-54
55+ 4%
10%
21%
35%
31%
200mins daily time spent on their phone today
100MnWill be
Shopping Online
2xTime spent by
working women
on internet
30%of Indian women
will be Online
200Mn+ Women
Source: IAMAI Digital Bharat, Google estimates, Bain-Google consumer research
Rural users
Source: CNNIC, IDC, Forrester, IAMAI, Morgan Stanley Research
6X growth in ONLINE SHOPPER base
2014 2016 2020
40
250
100
in m
illio
ns
Decoding the digital Influence
$35Bn Digital sales getting influenced by digital platforms
*Use internet at least once a month
• 1600 internet users (Male & Female)
• FMCG decision makers/ key influencers
• 13 cities across India in two different \ town-classes
• 8 FMCG categories
• Conducted between Oct - Dec 2014
Consumer Survey
Infant CareMale Grooming
Hair Care FoodsSkin care Oral careBeverages Home Care
Source: Bain-Google consumer research
35%Men strongly influenced by digital sources while
purchasing FMCG
22%women are influenced by digital sources while purchasing
FMCG
Source: Bain-Google consumer research; Numbers for women only
How To/Review videos
Brand website
Search engines
Social networking site
Online advertising1
2
3
4
5
Video/Banner/Text
With Influence coming from multiple digital platforms
© 2014 Forrester Research, Inc. Reproduction Prohibited
15
Year on Year Query Growth as of December 2014
Reflecting in faster growth in FMCG searches
97%
75%
57%55%
46%
38% 37%
Apparel Beauty Foods Infant Care Arts & Entertainment Travel & Tourism Finance
Source: Google internal, Growth of searches in Q4’14/Q4’13
Source: Bain-Google consumer research
Notes: Position on graph is based on relative ranking of categories. Women respondents considered for all rankings, except Male grooming
High
Low
Digital Density (% buying online)Low High
Digital Influence
on Purchase
Emergent Front-runners
Followers
Skin care Hair Care Male GroomingInfant Care
Oral care
Home Care Foods
Beverages
Beauty is set to explode on digital
2ndBiggest searched FMCG category
Only 15%Searches are branded
100%YOY growth in Shopping searches
Source: Google internal data for Oct-Nov’14
#1Searched category
in FMCG
Source: Google internal data for Oct-Nov’14
HighestInterest in Recipes in India
On YouTube
Top 5Most watched categories on
YouTube
Foods is the next big story
Channels
~50% online shoppers purchased
FMCG online
2in3buy more
when Shopping online
Consumers are already purchasing FMCG online…
40% women likely to purchase FMCG
in next 12 months
How likely are you to purchase any FMCG product online in the next 12 months? (Base: Women, Internet users)
Source: Bain-Google consumer research
Strong willingness in non-shoppers to buy
We expect India share to reach 5% by 2020
Notes: FMCG Online sales includes alcoholic drinks. Fresh food is excluded from overall FMCG sales.
Source: Euromonitor, TRAI, eMarketer, Bain analysis
$5BnFMCG Online Sales by 2020
0.3%
5.0%
2014 2020
50X Growth
Infant Care
Beauty
Male Grooming 25-30%
20-25%
8-10%
Notes: FMCG Online sales includes alcoholic drinks. Fresh food is excluded from overall FMCG sales.Source: Euromonitor, TRAI, eMarketer, Bain analysis
With the channel-mix of many categories
tilted towards online
How to Win?
Uncover category’s digital
truths
Wisely choose digital
battlefields
Ensure digital reinforces brand
strategy
Organize around consumers, not
screens
Re-allocate resources
• Impact of digital
• Profit pool shifts
• De-average consumers and portfolio
• Create seamless on/offline experiences that
• How digital fits within the brand’s strategy (vs. brand’s digital strategy)
• Create vs. just tell stories
• Deliver Perfect Online Sales Experience
• Shift media spends – follow your consumer
• Invest in technology/ IT/ Analytics
• Invest in new capabilities,
• Build new ecosystem partnerships
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Act NOW
Summary
$35BnDigitally influenced FMCG sales by 2020 (1/3rd of overall FMCG)
Infant Care, Beauty, Male GroomingDigital Pioneers of 2020
Act NOW
$5BnFMCG sold online by 2020 (50X growth)
250MnConsumers shopping online by 2020 (1/3rd of internet users)