E-COMMERCE E-VOLUTION - Kantar Worldpanel

© Kantar Worldpanel

E-COMMERCE E-VOLUTION eCommerce and Showroomers, an opportunity for everyone

© Kantar Worldpanel -2-

E-COMMERCE E-VOLUTION

Traditional

Modern Trade Offline

Modern Trade Online

Traditional vs. Off-&On-line Modern Trade

Hypermarket

Supermarket

CVS

Department Stores

Wet market

Butcher’s

Vege & Fish shops

Mom&pops

eCommerce (PC & Mobile)

TV Home-shopping & Catalog Orders

Direct sales/D2D

Regular Delivery



1) Total eCommerce market size (trillion KRW), FMCG eCommerce market size (trillion KRW) *FMCG: food & beverage groceries, household goods/car accessories, Cosmetics, Fresh food, Baby/kid products

Source: National Statistics Organisation

38 trillion KRW

Total E-Commerce Market Size in 2013

FMCG E-COMMERCE Market trend?

FMCG E-Commerce market size in 2013 13 trillion KRW (≒33%)



2003 2007 2014


eCommerce is GROWING EXPONENTIALLY

1) Total eCommerce market size(billion KRW), 2) FMCG eCommerce market size(billion KRW) *FMCG: food & beverage groceries, household goods/car accessories, Cosmetics, Fresh food, Baby/kid products

Source: National Statistics Organisation

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000Total eCommerce market size (billion KRW) FMCG eCommerce market size (billion KRW)

2001. 01 2002. 01 2003. 01 2004. 01 2005. 01 2006. 01 2007. 01 2008. 01 2009. 01 2010. 01 2011. 01 2012. 01 2013. 01 2014. 01


eCommerce grew to be one of the MAIN FMCG CHANNEL

1) FMCG channel value share% (excl. fresh food, gift channel)

Source: Kantar Worldpanel Household

-

10

20

30

40

50

60

70

80

90

100

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

FMCG Channel Value Share%

TRADITIONAL 25% 19% 16%

OTHER MODERN TRADE 9% 8% 8%

NON-STORE 15% 13% 7%

E -COMMERCE 2% 4% 10%

SUPERMARKET 25% 23% 28%

HYPERMARKET 24% 33% 31%

2003 2007 2014


Undoubtedly, KOREA IS TAKING THE LEAD in eCommerce

1) eCommerce channel value share% (excl. fresh food, gift channel)

Source: Kantar Worldpanel Household, Forrester, Gfk 2013

Taiwan

3%

US

4%

Germany

0.8%

Russia

0.7%

Vietnam

0.1% Malaysia

0.1%

China

1.9% (5% in key cities)

Brazil

0.2%

South Korea

10%

UK

5%

France

4% Spain

1%

Portugal

0.9%


12 15 17 16 16 16 19 20 21 24 25 29

MORE CONSUMERS are coming in and SPENDING MORE online

1) Avg. spending per household in eCommerce (10k KRW), 2) eCommerce Penetration%


-

10

20

30

40

50

60

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Avg. Spending per Household in eCommerce (10k KRW)

eCommerce Penetration%


1

6

11

16

21

26

31

36

41

46

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

130 128 129 127 126 126 118 117 117 115 114 112

eCommerce is EASY & ACCESSIBLE to modern consumers with a busy life

1) Avg. total FMCG shopping frequency (# of visit per year), 2) Avg. shopping frequency by main channel (# of visit per year)


Avg. Total FMCG shopping frequency (# of visit per year)

Avg. shopping frequency by main channel (# of visit per year)

2003 2007 2014 eCommerce 4 4 9

2003 2007 2014 Hypermarkets 21 26 23

2003 2007 2014 Traditionals 41 32 24

2003 2007 2014 Supermarkets 32 26 31


EVERYONE COMMERCE EVERYWHERE COMMERCE EMPOWRING COMMERCE


57% 26%

Buying FMCG online is a shopping routine for 20-30s

1) Total FMCG eCommerce penetration by age (excl. fresh food, gift channel)


83% 81%

20s 30s 40s 50s


For THOSE WITH BABIES OR KIDS, online shopping is a daily routine

1) Total FMCG eCommerce penetration by lifestage of 20-30s (excl. fresh food, gift channel), recent 1 year ending June 2014


81% 91%

Independent Household

Baby Family

83%

81%

80%


96%

Baby Family

79%

Kid Family

91%

Baby+Kid Family

68%

Baby/Kid+ Teen Family

71%

Teen Family

Among 20s…

Among 30s…


Yet, eCommerce is no longer a stranger to THE OLDER

1) Total FMCG eCommerce sales by age (excl. fresh food, gift channel), 2) Value% of each age group in online and total FMCG, recent 1 year ending June 2014


-

2

4

6

8

10

12

14

16

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

eCommerce Market Size by Age

30s 50% 29%

20s 23% 11%

40s 20% 35%

50s 6% 26%

Value% In Online

Value% In total FMCG


40-50s are moving toward eCommerce and Modern Trade

1) Channel value% in total FMCG by age


25% 20% 21%

27% 32%

9%

10% 8%

10%

11% 15%

14% 18%

13%

13% 2% 4%

2% 1%

1%

25% 25% 25%

26%

23%

24% 28% 27% 22% 19%

Total 20s 30s 40s 50s

2003 2007 2014

Total 20s 30s 40s 50s Total 20s 30s 40s 50s

Hypermarket

Supermarket

E-Commerce

Non Store

Other Modern Trade

Traditional 19%

13% 15% 22%

27%

8%

9% 7%

8%

10% 13%

10% 13%

12%

13% 4% 11% 5%

1%

2% 23%

19% 21%

25%

24%

33% 38% 38%

31%

24%

16% 9% 12% 14%

25%

8%

12% 7% 8%

8% 7% 6%

5% 7%

10% 10%

22%

18% 6%

3%

28% 20%

23% 31%

32%

31% 32% 35% 33%

23%


40-50s with babies or kids are familiar with eCommerce

1) Total FMCG eCommerce penetration by lifestage of 40-50s (excl. fresh food, gift channel), recent 1 year ending June 2014


42%

Teen Family

Among 40s…

Among 50s…

57%

26%

30%

Adult Family

19%

Senior Household

50%


68%

Baby/Kid Family

61%

Baby/Kid+ Teen Family

55%

Teen Family

51%

Adult Family


EVERYONE COMMERCE Consumers newly entering into eCommerce are YOUR OPPORTUNITY

40-50s are entering into eCommerce at a faster rate as more of them have babies or kids

Baby/Kid Family

Teen Family

40s

50s





1) Total eCommerce, mCommerce sales (trillion KRW)

Source: National Statistics Office

38 Trillion KRW

Total eCommerce (PC + Mobile) Market Size in 2013

Mobile Shopping in FMCG?

Mobile Shopping Market Size will exceed 10 trillion KRW in 2014

Mobile Shopping Market Size 7 trillion KRW (≒18%) in 2013


MOBILE DEVICES are reshaping the eCommerce landscape

1) Value% by device in eCommerce, 2) Mobile shopping penetration% by lifestage, Source: Kantar Worldpanel Household (Latest 6 months ending 14Q2)

3) Respondent% by lifestage, Source: Kantar Worldpanel Lifestyle Survey (Sample N=1,500, June 2014)

-

10

20

30

40

50

60

70

80

90

100

PC Value% in FMCG eCommerce

72%

Mobiel Value% in FMCG eCommerce

28% 1st half of 2014

Independent Household Baby/Kid Family

Baby/Kid+Teen Family Teen Family Adult Family Senior Household

Yes 62%

I’ve shopped mobile

Yes 72%

Yes 53%

Yes 41%

Yes 39%

Yes 25%



Yes 23%

Actual mobile shopping penetration for the latest 6 months

Yes 41%

Yes 20%

Yes 11%

Yes 9%

Yes 1%


DEVICE-FREE SHOPPERS, who use multi-screens across PC and mobile devices, are emerging

1) Shopper% by ONLY or MULTI device usage in eCommerce, Source: Kantar Worldpanel Household (Latest 6 months ending 14Q2)

2) Respondent% by lifestage, Source: Kantar Worldpanel Lifestyle Survey (Sample N=1,500, June 2014)

-

10

20

30

40

50

60

70

80

90

100

1st half of 2014

Only PC Shopper%

61%

Only Mobile Shopper% 10%

DEVICE-FREE (PC & Mobile) Shopper%

29%



Yes 49%

I’ve shopped mobile after comparing products via PC for the recent year

Yes 61%

Yes 52%

Yes 33%

Yes 33%

Yes 27%



Yes 65%

I’ve shopped via PC after comparing products mobile for the recent year

Yes 74%

Yes 63%

Yes 51%

Yes 46%

Yes 33%


Device-free shoppers SPEND MOST IN FMCG also, not only in eCommerce

1) Avg. spending by shopper group (10k KRW)

Source: Kantar Worldpanel Household (Latest 6 months ending 14Q2)

88 84 82 97 70

13 13 11 25 -

60 60 60 58 57

Avg. spending in total FMCG for the

last 6 months (10k KRW)

Avg. spending in eCommerce for the

last 6 months (10k KRW)

Avg. spending in offline for the last 6

months (10k KRW)

eCommerce Shoppers ONLY PC Shoppers ONLY Mobile Shoppers Device-free Shoppers Non eCommerce


35%

38%

34%

10%

15%

8%

15%

10%

12%

16%

3%

10%

8%

30%

20%

eCommerce is not a single channel We need to look at each device as a respective channel

1) Value% of online retailer by shopper group

Source: Kantar Worldpanel Household (Latest 6 months ending 14Q2)

Open malls Home-shopping & Department Store malls

Hyper malls Brand malls Social Commerce Others

Gmarket (18%) Auction (9%)

11st (8%)

GS shop (3.1%) Lotte mall (2.5%)

Hmall (1.5%)

Emart (8.0%) Homeplus (4.4%) Lotte mart (2.3%)

Gmarket (16%) 11st (10%)

Auction (12%)

GS shop (8.9%) CJ mall (3.9%)

Lotte mall (1.0%)

Homeplus (5.7%) Emart (3.4%)

Lotte mart (1.4%)

Gmarket (15%) 11st (10%)

Auction (9%)

GS shop (2.9%) Lotte mall (1.8%)

CJ mall (1.5%)

Emart (7.2%) Homeplus (4.5%) Lotte mart (0.6%)

ONLY PC

ONLY 모바일

PC & 모바일


EVERYWHERE COMMERCE Smartphone and new mobile devices are YOUR OPPORTUNITY




eCommerce and mCommerce is not only about purchasing channel It’s about CONSUMER EMPOWERING across path to purchase


Consumers’ paths to purchases are unpredictable and more complicated

STIMULI INFORMATION DECISION TRIAL PURCHASE INTAKE/USE RE-PURCHASE

▼ ▼ ▼ ▼ ▼ ▼

TV Ad Hypermarket Hypermarket Hypermarket Home Hypermarket

Friends Blog posts Hypermarket Hypermarket Home Social Commerce

PC Smartphone

CONSUMER ACTION

PLACE OF ACTION

PAST

PRESENT

DEVICE

FUTURE Shoppers have Non-Linear Path to Purchase Showroomers Reverse Showroomers (Webroomers)


Even when buying FMCG, 67% of consumers either Showroom or Reverse Showroom (Webroom)

1) Segmentation%

Source: Kantar Worldpanel Lifestyle Survey (Sample N=1,500, June 2014)

18%

9%

40%

Changes that eCommerce and mobile brought

>> Purchase Channel Multi-channel Shoppers E-veryone Commerce

>> Purchase Device Multi-screen Shoppers E-verywhere Commerce

>> Path to Purchase Non-linear Shoppers E-mpowering Commerce

67% of consumers Showroom

or Reverse Showroom Only 33% buy at the same place

where they browsed products


We are seeing CROSS-OVER SHOPPERS who browse and buy products across different channels

WEB-ROOMERS

SHOW-ROOMERS

Offline Online

Off

line

On

line

Purchasing

Bro

wsi

ng

TRADITIONAL-ISTS

TRADITIONAL-ISTS

SHOWROOMERS

WEBROOMERS

OMNI SHOPPERS

CROSSOVER SHOPPERS

WEBROOMERS

SHOWROOMERS

OMNI SHOPPERS


67% of consumers are CROSS-OVER SHOPPERS who both showroom and reverse showroom (webroom)

1) Segmentation%


SHOWROOMERS (18%)

Sometimes I shop online after comparing products offline (but never do vise versa)

WEBROOMERS (9%)

Sometimes I shop offline after comparing products online (but never do vise versa)

OMNI SHOPPERS (40%)

I shop and compare products across different channels (I do both showroom and webroom)

TRADITIONALISTS (33%)

I shop at the same place where I compare products (Browse offline → Buy offline, Browse online → Buy online)

1

2

3

4

When shopping…

SHOWROOMERS

WEBROOMERS

OMNI SHOPPERS

CROSS-OVER SHOPPERS

18%

9%

40%

67% of consumers Showroom

or Reverse Showroom Only 33% buy at the same place

where they browsed products


CROSS-OVER SHOPPING is found in all categories – food & non-food

1) Segmentation%


12%

9%

39%

Food SHOWROOMERS

WEBROOMERS

OMNI SHOPPERS

19%

9%

44%

Household care SHOWROOMERS

WEBROOMERS

OMNI SHOPPERS

17%

8%

43%

Personal care SHOWROOMERS

WEBROOMERS

OMNI SHOPPERS

16%

9%

39%

Cosmetics SHOWROOMERS

WEBROOMERS

OMNI SHOPPERS

24%

6%

51%

Baby products

SHOWROOMERS

WEBROOMERS

OMNI SHOPPERS


Cross-over shopping is an OPPORTUNITY for all, not a threat Omni shoppers who both showroom and webroom spend most in FMCG – even in offline

1) Avg. spending by segment(10k KRW)

Source: Kantar Worldpanel Household (Latest 1 year ending 14Q2), Kantar Worldpanel Lifestyle Survey (Sample N=1,500, June 2014)

TRADITIONALISTS SHOWROOMERS WEBROOMERS OMNI SHOPPERS

Avg. spending in total FMCG for the

recent year (10k KRW) 172 178 175 183

20 35 17 28

133 124 137 135

Avg. spending in eCommerce for the

recent year (10k KRW)

Avg. spending in offline for the

recent year (10k KRW)

CROSS-OVER SHOPPERS


EMPOWERING COMMERCE A new form of paths to purchases are YOUR OPPORTUNITY

Easy product comparison Price & Quality

Value for Money

In-Store Promotion via App




EVERYTHING COMMERCE


eCommerce will continue to grow as a main FMCG PURCHASE CHANNEL

1) FMCG channel value share% (excl. fresh food, gift channel)


2014

-

10

20

30

40

50

60

70

80

90

100

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Channel Value% in Total FMCG

TRADITIONAL 25% 19% 16%

OTHER MODERN TRADE

9% 8% 8%

NON-STORE 15% 13% 7%

E -COMMERCE 2% 4% 10%

SUPERMARKET 25% 23% 28%

HYPERMARKET 24% 33% 31%

2003 2007 2020

20%

2020

FMCG eCommerce Grow by 2.6 Times Bigger


And, PATH TO PURCHASE will be complicated more and more

Where to buy products

Track all different on- and off-line channels

Optimising retailing across on- and off-line

Adopting effective digital in-store activities

MULTI-SCREEN

DEVICE-FREE

MOROOMING

CROSS-OVER SHOPPING

BOOMERROOMING

WEBROOMING

Which devices to buy products with Track different devices for online shopping Optimising multiple screens

Where to search products Track diverse brand touchpoints Optimise digital touchpoints across multiple screens

SHOWROOMING

INTERNET OF THINGS


It’s only the BEGINNING of the Evolution eCommerce


REGULAR DISTRIBUTION CHECKUP and AGILE RETAIL MANAGEMENT are a must

Changing Retail Environment

Fiercer Competition

Diversifying Communication Touchpoints

Consumer’s Attitudes & Actual Purchase Behavior

Understanding rapidly changing

retail environment

Faster competition check by different

retail format

Continuous check through

HOLISTIC ANALYSIS

Better, Faster, and Smarter Retail Analysis

Digital Shoppers Digital Natives

Different Lifestyle & Lifestage

© Kantar Worldpanel -43- © Kantar Worldpanel

We help you see CONSUMERS behind the GROWTH OF ECOMMERCE

www.kantarworldpanel.co.kr | [email protected]

E-COMMERCE E-VOLUTION - Kantar Worldpanel

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