E-commerce Spreading its Fast Moving Net

Retail

The fast moving consumer goods category was the fastest growing sector in the e-commerce market in 2018, according to recent market data.

Online commerce for this sector in Hungary has grown by nearly 20% and reached HUF 41 billion a year, according to a survey by eMAG, an online shopping platform. As a result, the FMCG-category has become the fastest growing sector in the domestic e-commerce market which totaled HUF 425 bln last year.  

E-commerce in Hungary has been expanding intensely: it now accounts for 4.5% of the entire retail commerce. According to GKI Digital, in 2018 the total worth of Hungarian online orders was 17% higher than a year earlier.

At the beginning of this year, 3.2 million people shopped regularly online, showing 6.5% growth compared to a year ago.  

The average worth of online purchases was HUF 11,000 (net) per visit. Customers placed orders on average 12 times per year and spent HUF 133,000 in total. Last year, roughly 1.5 million people paid for their purchase online, which resulted in 7% growth.  

With HUF 97 bln turnover in 2018, technical goods remain the most popular category online. Yet it was FMCG that saw the biggest growth last year and the sector will continue to expand according to industry forecasts. In 2018 overall, 980,000 FMCG purchases took place, with consumers purchasing an average of 20 products at a value of almost HUF 23,000.

Growth Potential

“We expect further growth in the FMCG sector as ever more products fall in this category,” Catalin Dit, head of eMAG Hungary tells the Budapest Business Journal. “The ones most in demand are staples for daily life such as diapers, detergents, perfumes and clothing,” she adds.  

The growth potential of the online FMCG sector currently is significantly higher than in other sectors. One of the reasons is that online shopping is a convenient alternative to personal shopping, backed by secure payment and the presence of more delivery options. On the other hand, customers consider FMCG spending as a basic expense (like food or utility bills), which is not the case with other online products (e.g. electronic goods).

Future growth is fueled by the fact that more and more products are becoming available online. More products also makes it more likely that existing users, those most at ease shopping online, will do so more regularly. The most important tool to support the development of the domestic online market is increasing the frequency of the online purchases, since the items in this category – diapers, pet food or detergents – run out fast in any household.

The Hungarian e-commerce market is, as yet, relatively small but is constantly developing and growing in a rhythm which is faster than the average. The rate of growth was 16.9% in 2018 and it closed its year with a turnover of HUF 1.3 bln, eMag says.

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