It might be assumed that the ceiling has been reached for online FMCG sales, but that assumption falls wide of the mark.

While 20% of all retail spending in the UK is done online, for grocery that figure falls to less than 10%. FMCG is missing an opportunity to increase online sales – something which becomes even clearer when you look beyond the UK.

Globally, online FMCG continues to grow 10-times faster than the total FMCG category and one region leads the world – Asia.

Online accounted for 7.3% of Asian FMCG sales in 2017, versus 5.6% in western Europe and just 1.9% in the USA.

It’s a trend driven by necessity: historically sophisticated physical retail infrastructure just hasn’t existed in countries such as China, South Korea, Indonesia and Malaysia. For a growing number of middle-class shoppers, online has plugged the gap.

In Europe, it is an add-on to bricks-and-mortar stores. In Asia, online is the main event and there’s much that UK brands can learn from advances pioneered there.

Maximising mobile

Asian shoppers are highly engaged social media users and brands are adept at reaching these customers through mobile platforms.

Unlike the UK, where apps such as Instagram or Facebook often direct consumers back to online stores, Asian consumers can complete end-to-end transactions through their social media using private messaging.

Major ecommerce platforms in China, for example, allow individuals to benefit from collective deals using chat groups.

“Asian consumers want delivery times that are no more than three days, compared to a global average of seven”

UK buyers don’t yet see social media as a natural buying platform and there are cultural barriers too, particularly around data sensitivity. These need to be surmounted to unlock growth.

UK consumers are, however, more comfortable with the idea of social media marketing – 40% of people say they are keen to try a new product after seeing it recommended on social.

Health and beauty brands are already practised at using influencers to promote products and this sector is likely to be the most fertile ground for brands to explore a more direct sales approach on social media.

Beyond direct purchasing, European businesses should also make more of the experiential engagement potential of social platforms. This could include mimicking brands such as Chow Tai Fook, which has a WeChat loyalty programme that allows users to check loyalty points, coupons and orders. The key is to make the experience seamless and negate the need for consumers to open a new app.

Digital with a human face

Asian businesses skilfully bring the store experience online, whether offering personalised apps and packaging, or focusing on the way delivery teams interact with customers.

Coupang, South Korea’s largest online retailer, texts customers a picture of where their package has been left if they aren’t in, while its staff follow special requests such as not ringing the doorbell if shoppers have young children sleeping.

UK businesses need to consider how ecommerce can be a powerful extension of their brand values too.

Invest in the tech

Asian brands are also leading on technology innovation. Simply establishing an online service is not enough. Businesses must invest in their digital infrastructure, from checkout and payment through to order tracking and delivery.

Expectations about convenience are high among shoppers, although there are global variations. Asian consumers want delivery times that are no more than three days, compared to a global average of seven. We know same-day delivery is the preference for almost a fifth of UK grocery customers, but this generally remains a premium service rather than standard.

In countries where there are abundant street traders open 24/7, convenience has a different meaning and Asian brands have responded. Coupang has invested in a network of warehouses, trucks and thousands of delivery employees linked by advanced algorithms to offer same-day delivery.

Meanwhile, platforms such as HappyFresh let consumers buy products from different grocery stores through one app, all with next-hour delivery.

What’s next?

Asian ecommerce is now coming full circle. Brands are using ecommerce to grow their market share, partly by acquiring online platforms in other countries to grow internationally, but also to increase their product availability in store.

FMCG manufacturers are now setting up ecommerce platforms to sell directly to smaller, often independent, stores. By circumventing distributors, they can reduce costs for stockists and increase product presence on shelves to create another touchpoint for shoppers.

With around 75% of the UK’s 50,000 convenience stores estimated to be independently owned, the potential to exploit a similar model is significant.

UK businesses will, of course, need to adapt their approach to meet the needs of their local shoppers, homing in on what matters to specific demographics.

But brands should also remember to think bigger and bolder and learn from innovation overseas.