CPG eCommerce Growth Drivers and Tactical Recommendations for 2025

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After years of unprecedented growth driven by the pandemic, eCommerce for retail and consumer packaged goods (CPG) companies is stabilizing into a more sustainable yet powerful trajectory. Having spent years leading digital transformation initiatives at global CPG companies, I can confidently say that eCommerce is still the future of retail. The shift towards omnichannel marketplaces, direct-to-consumer models by leading brands, intensified competition, and evolving consumer behavior are driving a new wave of innovation in this space. In this issue of ecommert newsletter, we’ll unpack some of the latest trends and strategies that will define the winners in the CPG eCommerce race based on recent research data and key trends from the industry.

Key Highlights

• eCommerce resilience: Even in the face of a post-pandemic slowdown, global eCommerce is projected to grow at a compound annual growth rate (CAGR) of 9% through 2027.
• Strategic prioritization of category-specific efforts matters. As eCommerce continues to evolve differently across regions and categories, CPG brands need a targeted approach. For instance, with categories like video games and electronics already surpassing 50% online share since 2020, brands in slower-moving categories like groceries (projected at 11% by 2028) must continue to drive omnichannel efforts.
• Know your map and regional dynamics: The sharp contrast between Western Europe (12.4% growth) and Eastern Europe (95.1% growth) highlights the importance of region-specific strategies to allocate resources efficiently across diverse growth areas.
• Emerging winners: Companies that continue to invest in digital capabilities, advanced technology, and organizational agility are surpassing their competition in eCommerce.
• A bright future: By 2027, eCommerce is expected to account for 41% of global retail sales, a dramatic increase from 18% in 2017.

The eCommerce market size is projected to grow steadily from 2023 to 2025, but not at the pandemic-level spikes. The projections for 2023 to 2025 indicate growth in line with long-term CAGR (Compound Annual Growth Rate) trends from 2008 to 2019.

As our publications and the industry data point out, in the last few years, eCommerce has proven itself as resilient and more crucial than ever for CPG brands. While we saw a post-pandemic slowdown, eCommerce sales are still projected to grow at an impressive 9% CAGR through 2027, positioning it as a core pillar of the global retail landscape.

By 2027, eCommerce is forecasted to capture 41% of global retail sales, an incredible leap from just 18% in 2017. The growth is unstoppable, and those who invest smartly today will reap the benefits tomorrow.

The long-term trend still shows steady upward momentum. By focusing on profitability, consumer personalization, and category-specific strategies, global consumer brands can continue to capture market share in an increasingly competitive digital landscape.

Certain categories such as electronics, apparel, and beauty & personal care exhibit significantly higher penetration compared to others like food and beverages or home care. This suggests that consumer comfort and trust in purchasing more tangible or less perishable goods online (electronics, apparel) are greater than for items traditionally bought in physical stores (groceries or household products).

The Evolution of CPG eCommerce: Winners vs. Laggards

A recent survey of 825 CPG and retail executives, conducted across 11 markets, revealed a striking gap between the eCommerce winners and those falling behind. About 27% of retail and 20% of CPG respondents emerged as clear winners, achieving post-pandemic eCommerce growth rates exceeding 30%. Meanwhile, 21% of retailers and 25% of CPG companies reported growth of 10% or less, with little optimism about their future prospects.

The winners excel because they share some key characteristics:

1. Larger Digital Investments: Leaders allocate more than 10% of their total revenue to digital technology. This not only enhances their digital presence but ensures that they have the advanced infrastructure needed for scalability.
2. Mature Technology Stacks: When my team spearheaded the digital transformation efforts at Mondelēz, we prioritized building a robust tech stack that supported dynamic pricing, real-time inventory management, and personalized shopping experiences. Today, that’s a must-have for any brand hoping to stay competitive.
3. Agility in Organizational Structure: Winning companies embrace agility, building cross-functional teams that can pivot quickly to capitalize on market opportunities. At PepsiCo's Sabra, we built agile teams that operated across traditional silos, fostering an environment of rapid innovation and iteration. This ability to quickly adapt and experiment is what sets winners apart.

Growth Trajectory of eCommerce Categories

The growing penetration of eCommerce across various categories from 2016 to projected levels in 2025. Certain categories, such as?electronics, apparel, and?beauty & personal care,?exhibit significantly higher penetration compared to others like?food and beverages?or?home care. This suggests that consumer comfort and trust in purchasing more tangible or less perishable goods online (electronics, apparel) are greater than for items traditionally bought in physical stores (groceries or household products).

For a global consumer brand, these trends highlight key opportunities:

• Category-Specific Focus: Brands should invest more in categories where eCommerce penetration is already high and is expected to keep growing. This could include expanding product lines, optimizing digital marketing, and offering exclusive online products in the booming categories such as beauty and electronics.
• Omnichannel Strategy: Categories like food and beverages, which have slower eCommerce growth, might benefit from omnichannel approaches. Since customers still prefer in-store purchases, focusing on “buy online, pick up in-store” (BOPIS) or quick delivery options could help accelerate growth.

Regional Growth Dynamics

• Asia and Latin America: These regions are showing the strongest projected growth, particularly with a higher proportion of respondents forecasting growth between 30%-50% or more. In Asia, 29% of respondents reported post-2020 growth of over 50%, and 28% foresee similar trends through 2027. Similarly, Latin America reflects strong growth expectations, with 35% predicting eCommerce expansion rates of 30%-50% or more by 2027.
• US: The US shows a slower growth trend, with 28% forecasting up to 10% growth in the coming years, and only a small segment anticipating over 50% growth.
• Europe: This market shows more moderate growth expectations, with the majority of respondents indicating a growth range of up to 30%. This aligns with the more mature state of eCommerce in Europe.

Strategic Implications:

• Focus on Emerging Markets: Asia and Latin America clearly present the most significant opportunities for eCommerce growth. These regions should receive increased investment, particularly in areas like infrastructure, localized digital marketing, and logistics capabilities to cater to their rapidly growing online consumer bases.
• Adjust US and Europe Strategies: For mature markets like the US and Europe, the focus should shift towards maximizing profitability, enhancing personalization, and improving customer loyalty through omnichannel strategies, rather than pursuing aggressive expansion.

Market Snapshot: Europe

The fashion category in Europe continues to lead online sales, generating an impressive $149 billion, with Apparel making up 59% of the category’s sales. Footwear and Bags & Accessories follow with 23% and 18% respectively, reflecting a strong consumer preference for online shopping in fashion.

In electronics, Consumer Electronics dominated with 68% of the total $143 billion revenue, showcasing the continued shift toward digital and connected devices. Electrical Appliances contributed 32%, pointing to steady demand for home technology.

Home-related categories also saw notable growth. Furniture and Homeware generated a combined $134 billion, signaling the increasing importance of home improvement and comfort, especially with Homeware leading at 38% and Furniture close behind at 62%.

DIY and vehicle parts also exhibited strong dynamics with Tools & Construction Supplies growing by 55% and Vehicle Parts by 28%, suggesting a rising trend in home and vehicle enhancement projects.

Maturity Assessment and eCommerce Enablement

• Team agility highlights the need for cross-functional and agile teams across categories to enable faster decision-making and more effective execution in eCommerce. For a global brand, this implies fostering a culture of agility where the eCommerce teams are integrated with product, marketing, and operations teams for seamless execution.
• Tech stack & digital investments are critical to support long-term growth in eCommerce. For example, investing more than 10% of sales into digital technologies (as indicated) helps brands stay competitive in a digitally-dominated landscape. For large consumer brands, investments in AI, analytics, and automation will ensure better data-driven decision-making across markets and product categories.
• Organizational structure optimization means integrated teams between eCommerce and traditional channels in the CPG space. For a global CPG brand, that means removing silos and ensuring digital-first approaches align with traditional retail strategies, leading to a unified brand experience across all channels.
• Ambitious initiatives & other initiatives supporting eCommerce involving AI-driven personalization or omnichannel innovations, will ensure our brand maintains a competitive edge in a maturing eCommerce environment.

Key Recommendations for CPG Leaders to Thrive in eCommerce

If you’re looking to cement your position as a leader in eCommerce, you need more than just a transactional approach. Here are my top recommendations for CPG leaders based on years of hands-on experience at leading global companies:

1. Invest Heavily in Technology: Technology is the engine behind eCommerce success. Invest in AI, data analytics, and third-party solutions that can optimize your eCommerce ecosystem. At Mondelēz, we deployed an AI-powered digital shelf analytics tool to optimize product visibility across eCommerce platforms, driving significant improvements in online sales.
2. Enhance Organizational Agility: Agility is crucial. Build teams that can move quickly and aren’t restricted by legacy systems or processes. Focus on creating cross-functional, agile teams that could pivot with the market—this kind of structure allows companies to seize new opportunities and adjust to consumer shifts rapidly.
3. Expand Your Digital Investments: Winners are defined by their digital investment. You're falling behind if you're not allocating at least 10% of your total revenue to digital initiatives. Technology investments aren’t a one-time event—they require constant iteration and scaling. Take bold steps to increase your budget for tech-driven initiatives that can fuel sustainable growth.

Tactical Playbook for eCommerce Success

Success in eCommerce requires more than just following trends—it requires bold, tactical moves. Here are three essential tactics to drive your growth:

1. Emphasize Tech Maturity: Over 70% of retail and CPG winners have already deployed mature tech platforms, compared to fewer than 30% of laggards. Leaders leverage third-party solutions, data platforms, and digital tools to optimize operations. Investing in the right technology at the right time is non-negotiable.
2. Execute Ambitious Initiatives: Don’t be afraid to take risks. Dynamic pricing, personalized marketing campaigns, and even product customization are all initiatives that leading companies are deploying successfully.
3. Build Cross-Functional Teams: Agility in your team structure is no longer a “nice to have”—it’s essential. Sixty-four percent of eCommerce winners have adopted cross-functional teams, compared to just 30% of laggards. Breaking down silos and fostering collaboration across departments will be key to capitalizing on market trends.

Stay ahead of the curve..

Mert Damlapinar

References: BCG, Ascential, Insider Intelligence, Fox Intelligence, Forrester, Statista, ecommert research

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About Mert Damlapinar

Mert Damlapinar is a Top Voice on LinkedIn and a multi-award-winning global digital commerce leader. He has worked in digital commerce, retail media, digital shelf, and artificial intelligence for over 16 years. He has held executive positions in global companies such as L'Oréal, Mondelēz, and Sabra/PepsiCo. He is also the author of the bestselling books "Analytics of Life" and "Agile Analytics for Start-Ups".

He holds a master’s degree in Applied Business Analytics from Boston University, a marketing degree from Cornell University, and two executive graduate degrees in Artificial Intelligence and Machine Learning and Digital Transformation from Massachusetts Institute of Technology.

He has an in-depth knowledge of omni-channel strategies, retail media performance and analytical insights. As founder and the CEO of the ecommert platform, he applies global solutions, artificial intelligence tools, and frameworks for retail media optimization, digital shelf excellence, actionable insights for CPG brands and advises Fortune 500 companies and digital commerce executives.

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