Nielsen Russia experts discuss Russian FMCG market trends and developments
Delivery services and hyper-local food-related delivery services are trending in Russia. But is this growth sustainable, and are the trends going to last? A new Nielsen Russia podcast episode is devoted to a discussion of the Russian e-commerce FMCG segment and factors defining its development in 2020 (available in Russian here).
Online FMCG buyer categories in Russia
A common perception of online FMCG buyers in Russia is that they are solely millennials, focused on their careers and too busy to go to a grocery store. However, not everything is as it seems. There are some differences between Russian e-commerce buyers in general and people who buy FMCG products online.
Online FMCG buyers as compared to online shoppers in Russia
The first one is the gender breakdown: the number of men buying FMCG (including groceries and food delivered from restaurants and dark kitchens) is roughly equal to the number of women buying such products. Offline buyers are predominantly female.
The second is the lack of age difference: while up to 21% of online FMCG buyers are under 28, most of the FMCG internet buyers are around 39, same as for offline purchases in this market category.
It is also worth mentioning that 10-12% of consumers order from intermediaries instead of online retail shops.
At the same time, it’s too early to talk about Russian consumers fully switching to e-commerce. In Moscow only about 5% of e-commerce buyers make most of their purchases online.
Somewhat surprisingly, offline shopping frequency did not decrease for most e-commerce FMCG buyers: only 25% of respondents in a Nielsen Russia study claim that they shop at local grocery stores less often. So far, online purchases have been complementing trips to brick-and-mortar stores.
FMCG online shopping: not just for hipsters
Turns out, career aspirations are not the only reason to switch to buying FMCG online. Families, especially with small children and mothers on maternity leave, are also making that choice.
The main driver for parents with small children is convenience: being able to make large-volume purchases without having to deal with the logistics of shopping with an infant, especially if there’s no car available.
This not an uncommon situation in Russia: according to Statista, while 47% of respondents have their own car available, only 28% of respondents have access to a family member’s car. This means that a lot of stay-at-home moms or moms on maternity leave might have restricted access to a vehicle.
FMCG performance online by product category
According to Nielsen Russia data, online FMCG purchases grew by over 50% last year, and FMCG online sales are now almost 1% of the total e-commerce market. However, not all FMCG categories are online-friendly: dairy and meat products, frozen products, and similar high-maintenance categories are lagging behind. For these categories, growth is around 30%.
For comparison, online sales of toothpaste grew by 80% and coffee sales grew by 90%. As a general rule, bulky items, such as large diaper boxes, or products with a predictable pattern of consumption, such as dog food, are among the most popular FMCG categories online.
FMCG segment in Russia: 2020 trends
Nielsen Russia experts predict that the FMCG e-commerce segment is going to continue expanding, both as online marketplaces and retail chain online stores and as new delivery services, including hyper-local delivery services. The latter are becoming more prominent and starting to expand outside of Moscow city limits.
One of the trends worth watching is offering faster delivery. For example, Ozon now promises delivery within 45 minutes, making purchasing frozen or raw food feasible. Such orders are most likely going to be fulfilled through dark stores.
Direct-to-consumer e-commerce stores of FMCG brands are less well-developed. Independent FMCG producers often don’t have enough insight into their customer segments and are still building out their B2C sales infrastructure, from customer journey insights to logistics.
Driving sales of FMCG products online: advice from experts
This is what FMCG market experts from Nielsen Russia recommend in order to profit from the online FMCG market growth:
- optimize for branded searches
- consider an omnichannel marketing approach to drive recognition
- build recognition online for all steps of the customer journey
- use offline stores for experimentation, especially when launching new products
- find ways to maximize upsells online, for example recommending additional goods during checkout
- pay particular attention to customer reviews: according to Nielsen Russia data 44% of online users trust online reviews, and 37% of online buyers report that their decision on whether to buy a product was influenced by online reviews.
Need help in reaching out to your Russian FMCG buyers? Contact our expert team to hone your online marketing strategy for Russia.