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Global eCommerce Expansion:
Opportunities and Threats in Beauty,
Fashion, FMCG and Luxury
A Benchmarking Report
Executive Summary
In a time of unprecedented growth in eCommerce, companies are increasingly competing over new
opportunities in international markets. Establishing a new eCommerce presence, or expanding an
existing one, is a considerable challenge. Successful implementation requires a large amount of
technical skill, market knowledge, analytics as well as supply chain expertise.
Where do the opportunities lie for retailers looking to expand? And to what extent do companies
expect to seek external assistance for international expansion?
In December and January of 2014/15 Worldwide Business Research and arvato surveyed industry
executives in the Beauty, Luxury, Fashion and FMCG industries, focussing on international expansion
trends in omni-channel eCommerce.
The survey was completed by 93 industry executives with job titles including Head of eCommerce,
Director eCommerce, Managing Director and Vice President of Digital Commerce – this report
presents the survey’s findings.
Headline Findings:
• Up to 62% of FMCG businesses surveyed operate their eCommerce business entirely
in-house, contrasted with only 40% of the fashion industry.
• Online marketing was consistently named as the aspect of eCommerce most likely to
be outsourced.
• Nearly 25% of respondents in the luxury industry named China and the USA as key
areas for growth in eCommerce sales in the next four years.
• Europe is the region in which businesses are most likely to look for external support to
grow their omni-channel eCommerce sales.
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Q1: In which countries do you have an
existing online presence?
The UK was the number one marketplace among
surveyed businesses across all four market
segments. In fact, 100% of responding businesses
in the beauty sector have an eCommerce presence
there.
The USA & France were the second most popular
markets with Spain, Denmark & Germany also amongst
the top ranked countries. This underlines a European
focus in the eCommerce strategies of the businesses
surveyed in this report across all four sectors.
Q1 Beauty
Q1 Fashion
Beauty
Fashion
United
Kingdom
100%
46%
USA
36%
France
Germany
32%
Netherlands
27%
Spain
27%
Italy
27%
FMCG
95%
Suisse
44%
Denmark
44%
Sweden
44%
Finland
44%
Spain
44%
Italy
44%
United
Kingdom
43%
France
Spain
56%
Luxury
United
Kingdom
Germany
56%
France
92%
Q1 Luxury
Q1 FMCG
Denmark
United
Kingdom
Germany
USA
50%
Denmark
507%
38%
38%
33%
Suisse
33%
Sweden
33%
58%
Germany
38%
Netherlands
96%
France
46%
Italy
46%
Market in focus: USA
Total Online Sales in €bn
558
528
Population (2014): 322m / Currency:
U.S. Dollar (USD) / GDP per capita
(2014): 39,141€ / Internet users (2014):
87% / Online buyers (2014): 208m /
Online spend per customer p.a. (2014):
2.027€
Sources: Internetlivestats, KPMG, eMarketer, ITU,
Webcertain
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495
9% CAGR
459
420
379
340
271
2012
304
2013
2014e 2015e
2016e 2017e 2018e 2019e
2020e
Q2: Who currently operates your
eCommerce Business?
Between 40% & 62% of respondents keep their
entire eCommerce business in-house dependent
upon the sector.
A completely outsourced solution is very rare
amongst responding businesses, however, up to
Q2 FMCG
half of respondents reported a mixed approach,
with part of their operations in-house, and part
outsourced. This represents an opportunity
for retailers to partner with third party solution
providers to streamline their transition into new and
emerging markets.
Q2 Beauty
FMCG
Beauty
Completely
outsourced
Entirely
operated
in-house
38%
62%
Partly
operated
in-house
Partly
operated
in-house
41%
55%
Luxury
Completely
outsourced
Entirely
operated
in-house
4%
Partly
operated
in-house
Entirely
operated
in-house
Q2 Luxury
Q2 Fashion
Fashion
5%
52%
44%
Entirely
operated
in-house
50%
50%
Partly
operated
in-house
Outsourcing elements of the eCommerce business
represents a significant opportunity for third party solution
providers to assist in streamlining the transition into new
and emerging markets.
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Q3: Which services did you outsource?
Overall the most popular areas for outsourcing were
online marketing, website development and website
operation – indicating a clear skills gap in this area. The
rapid growth in digital marketing, and development of
the technology which surrounds it, means that large
international retailers are looking to external experts
to provide access to innovative new strategies in an
attempt to get the edge on the competition.
Financial services were most likely to be kept
in-house, likely due to business sensitivity. In
many ways this result was a surprise, given that
many retailers do, in fact, outsource these critical
financial services. This is often due to a lack of the
required skills available in-house, and both the
efficiency and ease of bringing in external expertise.
Q3 Which services did you outsource?
Beauty
78%
Fashion
FMCG
62%
Luxury
50%
44%
42%
39%
38%
33%
25%
31%
25%
23%
23%
25% 25%
23%
13%
11%
8%
17%
0%
Website
Development
(Online Shop)
Website Operation
(content management,
feature adaption, bug
fixing, KPI Reporting &
Analysis, etc)
Online Marketing
(SEO, Affiliate
Marketing, etc)
Logistics and
Fulfilment
Customer Care /
Call Centre
17%
11%
0%
Financial Service
(Payment and Risk
Management)
Businesses were less likely to outsource services which affect
the customer directly, as well as business sensitive financial
services. However, retailers who struggle to find the
necessary skills in-house do still look externally for expertise
in these areas.
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Q4: In which countries are you interested for potential
future global expansion and over what timeline?
Interestingly, no businesses had clear expansion
plans more than 4 years in the future. This may be
an indication of caution in a fast-paced and rapidly
changing market.
Expansion plans across the four industries brought
up familiar names, China and India amongst other
emerging markets, which have demonstrated
Q4 Beauty
The USA was also named as a popular market for
international eCommerce expansion, likely due to its
high-levels of familiarity and trust with eCommerce.
Q4 Fashion
Fashion
Beauty
USA
14%
USA
China
14%
China
12%
16%
Japan
12%
16%
India
9%
France
5%
India
Russia
5%
Germany
Brazil
5%
France
1-2 years
[2015-2016]
3-4 years
[2017-2018]
Q4 FMCG
France
5%
16%
12%
4%
3-4 years
[2017-2018]
Brazil
14%
5%
10%
China
14%
South
Korea
14%
3-4 years
[2017-2018]
12%
USA
China
14%
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12%
Q4 Luxury
10%
1-2 years
[2015-2016]
8%
4%
Luxury
Sweden
Singapore
24%
1-2 years
[2015-2016]
FMCG
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not only their taste for high-profile European and
American goods, but also growth amongst middle
class consumers with high purchasing power.
12%
8%
16%
Germany
12%
4%
France
12%
4%
Belgium
12%
UK
12%
Poland
8%
4%
India
8%
4%
Japan
8%
4%
1-2 years
[2015-2016]
3-4 years
[2017-2018]
Q5a: In which regions would you consider an
outsourcing service provider to support the global
expansion of your B2C eCommerce Business?
The majority of respondents stated that they were
not seeking a service provider at present.
Q5 In which regions would you consider
10%
Of the regions respondents who would consider an
outsourcing partner, Europe was the most popular
choice of region, followed by Asia-pacific.
7%
4%
2%
1%
1%
0%
Africa
Asiapacific
China
Russia
Europe
Latin
America
North
America
Q5b: In these regions which key services would
you look to outsource in support of your B2C
eCommerce business?
Online and affiliate marketing was the area in which
most respondents reported that they would be
interested in outsourcing. The least popular was
financial services, further underlining a trend first
identified earlier in this report.
Q5.1 : In these regions which key services
50%
39%
22%
Online marketing again indicated
as a key area in which business
are looking for external support.
Market in focus: China
Population (2014): 1.4 bn / Currency:
Chinese Yuan Renminbi (CNY, ¥) / GDP
per capita (2014): 4,842€ / Internet
users (2014) / Online buyers (2014) /
354m / Online spend per customer p.a.
(2014): 658€ Sources: Internetlivestats, KPMG, eMarketer, ITU,
Webcertain
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17%
6%
0%
Financial
Service
Customer
Care/ Call
Centre
Logistics and
Fulfilment
Online
Marketing
Website
Operation
Website
Development
Total Online Sales in €bn
435
25% CAGR
469
495
392
338
276
211
85
2012
140
2013
304
2014e 2015e
2016e 2017e 2018e 2019e
2020e
Q6a: With regard to multi-channel solutions,
in which regions would you consider an
outsourcing service provider to support your
multi-channel approach?
In the multi-channel area, again, Europe and Asiapacific came out as the more preferable options for
partnership with an outsourcing provider.
Q6 With regard to multi-channel solutions
8%
5%
Europe remains a key
battleground for outsourcing
service providers in multi-channel
2%
1%
1%
Africa
2%
Asiapacific
China
1%
Russia
Europe
Latin
America
North
America
Q6b: In these regions for which key services would
you consider support for an outsourcing service
provider for your multi-channel business?
Q6.1 In these regions for which key services
In regard to multi-channel respondents showed a mixed
willingness to outsource, with on/offline customer care
being the most likely service to outsource.
Businesses want to keep their
logistics and fulfillment cards
close to their chest – they are
more likely to look for assistance
with direct customer care.
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Operation of Centralised
B2B/B2C inventory
36%
Online/offline
customer care
55%
Order at store
(online order at retail store
36%
Return at store (return
handling at retail store)
36%
Click & collect
(pick up at store)
36%
Ship from store
(ship from retail store)
27%
Appendices
Do you have an existing eCommerce presence?
Do you have an existing eCommerce presence?
99% Yes
1% No
In which country is your global headquarters?
In which country is your global headquarters? BEAUTY
Beauty
In which country is your global headquarters? FASHION
Fashion
Suisse
5%
Sweden
5%
4%
In which country is your global headquarters? FMCG
Germany
France
5%
www.arvato.com
8%
80%
United
Kingdom
In which country is your global headquarters? FASHION
Luxury
Italy
5%
5%
Belgium
9%
France
5%
90%
9
8%
United
Kingdom
90%
FMCG
Germany
USA
France
United
Kingdom
81%
United
Kingdom
About arvato
Omni-channel retailing in fashion, beauty, luxury
and other consumer-driven industries bears huge
international growth potential for both established
and new players. Having the right partner to
manage the complexity at speed is key to success
in these highly competitive industries.
arvato has successfully helped leading consumer
brands such as Tommy Hilfiger, Esprit, Nestlé,
Douglas, Triumph and others to build and grow their
eCommerce business internationally. With 68.000
employees and 4.4 billion € revenues, arvato is one
of the globally leading outsourced service providers
for supply chain management & eCommerce as well
as call center, payment, IT and marketing services.
Leveraging a global infrastructure of 110 fulfilment
centers in 22 countries, 25.000 call center seats
Global Presence
Global Experience & References
arvato’s Service Portfolio
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www.arvato.com
for customer services with 30 languages and a global
payment gateway covering all leading payment
methods, arvato is in a unique position to support
clients at their global growth strategy across B2C and
B2B channels.
This includes services & solutions in markets such as
China or Russia where arvato runs significant domestic
operations for logistics fulfilment, call center, payment
and marketing for leading fashion, beauty & luxury
brands such as Yves Rocher, L’Oreal or Fossil.
arvato’s services span the complete eCommerce value
chain: Implementation and operation of online-shops
such as Demandware, Hybris or Magento, warehousing
& transportation, domestic and cross-border, as well as
financial services, customer service and digital marketing.
arvato is a 100 % subsidiary of Bertelsmann SE & Co. KGaA.
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