Reynold D’Silva
Oct 31, 2016

The coming wave of ecommerce for consumer goods

Online sales account for a small amount of FMCG revenue today, but brands need to prepare for rapid change or risk getting swamped, writes Facebook's Reynold D'Silva.

Reynold D'Silva
Reynold D'Silva

Ecommerce is now a big and growing share of many FMCG product categories across the world. China, Europe and the US are the biggest ecommerce markets globally, and there is a lot brands at home can learn from these giants. Personal-care brands like Inoherb in China and Dollar Shave Club in the US have leveraged ecommerce to disrupt and capture market share from strong, well-established brands like Olay and Gillette.

In many cases, these brands no longer need research-and-development departments, factories, salespeople or retail outlets. The combination of OEM suppliers, digital marketing platforms and ecommerce has disrupted the traditional barriers to entry and is reinventing the path to purchase.

While ecommerce contributes less than 1 percent of sales in Southeast Asia today, analysis by A.T. Kearney predicts this will grow tenfold by 2020, creating both opportunities and challenges for FMCG marketers.

Ecommerce or social commerce?

Unlike the US, where consumers have both mobile and desktop computers, most consumers in SEA use only mobile phones to access the Internet. In Malaysia, people spend 187 minutes each day on their mobile, while their neighbours in Thailand spend 160 minutes per day (How Southeast Asia Uses Smartphones, eMarketer, 2016). Even among those who visit ecommerce sites regularly, the majority of consumers outside the top cities only use mobile devices for access. This is one of the reasons why 30 percent of ecommerce in SEA takes place through conversations on social media and messaging apps like Facebook and WhatsApp.


This behaviour, known as social commerce, is particularly well-suited for situations where buyers need to interact with sellers to build trust or get expert advice. It also enables sellers to upsell or cross-sell. Here’s a typical example:

But this is obviously a high-cost, high-touch model and isn’t appropriate for all brands and categories. It’s important to use the right ecommerce strategy, based on the consumer mindset and shopping behaviour of each category.

Big bulky periodic purchases: Subscription + automation

This includes all the staples that consumers buy over a fixed purchase cycle, usually monthly, such as diapers, toilet paper, laundry detergent, fabric conditioner, and so on. For these product categories with a fixed consumption pattern, annual subscriptions are the solution. Consumers have a preferred brand, they don’t enjoy shopping for these products or hauling them home and they just don’t want to have to think about the whole thing as long as it’s delivered at the right time.

Regular replenishmentsPrediction + instant buying

This includes products that people remember to buy only when they run out.Examples include toothpaste, razor blades and instant coffee. For replenishment brands, the Amazon “Dash Button” is a great example of how to respond to this consumer need, enabling consumers to conveniently buy whenever they need. 

Impulsive Indulgences: Tempt, Swipe & Buy

These are discretionary purchases like ice creams, cosmetics etc. Consumers are open to the power of suggestion and at times are willing to actively browse and buy. A great example is Sephora’s Tinder-style shopping experience for mobile, which lets consumers swipe and buy for instant gratification.

High-involvement purchases: Humanise

For higher-involvement categories, consumers want to have a conversation. This is quite similar to what happens in an actual human interaction—getting to know the seller, building a relationship, getting expert advice, buying something other than what was originally intended, buying more, getting a special deal or discount and so on. Infant nutrition, high-end skincare and complex devices are the right categories to take this expensive approach.

Using ecommerce as an insight engine for growth

Ecommerce can be a great source of both qualitative insight and quantitative data:

  1. Product reviews provide direct consumer feedback, highlighting areas for improving products or creating new ones.
  2. Ecommerce sales can be early indicators of consumer demand, providing valuable input for marketing and manufacturing decisions.
  3. Quantitative data on early adopters can be used for targeting a broader audience with lookalike profiles similar to current buyers.
  4. Predictive analytics can help target consumers for whom specific brands or products have become relevant. This is particularly valuable to life-stage brands like acne skin care and diapers. According to data from Smart Insights, campaigns using predictive analytics drove up to 73 percent higher sales in 2015.

Build your brand with ecommerce

Since the era of mail-order catalogues, retail channels have shown that they are capable of building brands. In Asia, the Blue Moon detergent brand has grown both equity and market share by relying entirely on in-store activation. More recently, the Dollar Shave Club brand in the US has been built almost entirely through digital and ecommerce channels. This gives brands a platform to communicate their unique stories, points of difference and advantage, using a combination of video ads, product demos and consumer testimonials. The combination of digital channels like Facebook and ecommerce platforms lets people browse the virtual aisles to discover and fall in love with new brands.

Ride the wave now

With Southeast Asia being pegged as the new frontier for ecommerce, and internet penetration expected to grow to more than 50 percent in most Southeast Asian countries by 2019 (Internet Users and Penetration in Southeast Asia, eMarketer, 2016), it’s critical for FMCG brands to take action now and start implementing the right ecommerce strategy for their brand or category. Ride the wave now or risk being washed out. The choice is yours. 

Reynold D’ Silva is regional head of strategic marketing for brands and ecommerce at Facebook

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