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Capturing the growing influence of the internet on beauty and hygiene (B&H) products, a report released by Google and Bain & Co. on Friday revealed it would influence $11 billion of the total sales in the FMCG sector for such products by 2020.
This represents two-thirds of B&H sales of $17 billion in 2020, the report said.
While the total influence of the internet will impact $35 billion worth of FMCG sales, which is 1/3rd of total sales, in India, beauty and hygiene will see two times higher impact as more and more users get online to research in this category, the report said.
Projecting the growth of online shoppers who will buy beauty and hygiene products online, the report estimated 130 million Indians to shop online by 2020 making the internet a prominent sales channel forming 20 percent of total sales estimated to be $3 billion.
This is backed by the strong growth in the number of online users in India, which will continue to see rapid adoption reaching approx 650 millon by 2020. Over 200 million women will be online with the internet reaching over 250 million rural users in India by 2020. The population of online shoppers will continue to see rapid growth in India, reaching 250 million by 2020 - 40 percent of all internet users, the report said.
Speaking about the key findings of the report, Vikas Agnihotri, industry director, Google India said: "By studying the behavior of the lead consumers from an FMCG standpoint, it is clear that FMCG companies in India need to start thinking of digital as a more strategic medium and chart out a digital growth path for their products.
"Adoption of highly consumed product categories in beauty and hygiene category is 2x higher in digital households compared to non-digital households and even the penetration of emerging product categories is 2 to 3x higher in digital households, making the digital audience an extremely important audience for the industry," Agnihotri said.
Speaking about the current engagement levels of FMCG companies with the digital medium, Nikhil Prasad Ojha, partner, Bain & Co., said: "Most FMCG companies in India have underestimated the impact of internet and are struggling to ascertain a clear digital roadmap for their products."