Sales grew only 9% in the first quarter. Is the Latin American online FMCG market weak?

Sales grew only 9% in the first quarter. Is the Latin American online FMCG market weak?

It is understood that due to the increase in product prices caused by costs and inflation, consumers are limiting their purchasing desires in order to reduce spending, a phenomenon that is particularly evident in fast-moving consumer goods . Over the past year, sales of fast-moving consumer goods in Latin America have continued to grow by double digits, but in the first quarter of this year , it fell to 9% , and the frequency of fast-moving consumer goods purchases was lower than before the epidemic .

 

It is worth noting that consumers behave differently across countries and socioeconomic levels ( SEL ) . Mexico is one of the countries where online sales of FMCG products remain above pre- pandemic levels.

 

In contrast, consumers in Brazil, Colombia and Argentina are experiencing the greatest economic pressures. The changes can be seen in the online spending categories, with Brazil moving from the lowest online spending on food to the highest online spending category .

 

After two years of the pandemic , 14% of households in Latin America purchased fast-moving consumer goods online. In Chile, the penetration rate of online shopping was eight times higher than before the pandemic , while in Brazil it doubled .

 

Different economic realities mean different consumer responses. It is understood that in Colombia and Argentina , online consumers are reducing the categories of FMCG purchased online and buying cheaper FMCG at reduced prices to make online spending more rational .

 

In Brazil, affected by inflation, online consumers have begun to turn to low-end brands in order to buy more fast-moving consumer goods to meet basic living needs .

 

While overall FMCG sales and volumes have declined in Latin America so far, the online food category is on the rise. The number of online food buyers increased in Q3 2021 compared to Q1 2019. Across Latin America, 64% of online food consumers are from lower socioeconomic regions , while 59% are from higher socioeconomic regions .

 

In addition, according to Kantar data, 44% of online consumers in Latin America are very concerned about environmental issues and pay special attention to environmental protection and energy-saving practices of packaging and products when choosing to buy . At the same time, more than one-third of online shoppers said that many products do not carry relevant labels such as " environmental protection ", " green " and " natural " , which will affect the relevance and accuracy of product searches.

 

To understand the Latin American market, sellers need to understand the latest market trends and prepare products with high demand and high sales for the market .

Latin America

Fast Moving Consumer Goods

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