Smartphone ‘addiction’ among millennials driving e-commerce for FMCG brands, says Mondelez marketer

Ganesh Kashyap, director of e-commerce, Mondelez at Millennial 2020

Mondelez’s Ganesh Kashyap presents data showing explosive growth in online snack buying in China

The director of e-commerce for Mondelez International has suggested that convenience cannot explain the rapid growth in the online purchasing of FMCG brands in China and elsewhere in Asia, and that the habitual use of smartphones by millennials is what is driving the trend.

Presenting a case study on an idea to revive flagging sales of Oreo biscuits in China at the Millennial 2020 conference in Singapore, Ganesh Kashyap, GM and director of e-commerce for Mondelez International in Asia Pacific, said that as millennials become mothers, they are taking their purchasing behaviour into categories that until recently have been relatively untouched by e-commerce.

Using India as an example, the former management consultant for Bain and Deloitte said that “mum and pop” shops are just as convenient for consumers as e-commerce, since many also do home delivery, offer credit and are open 24 hours a day.

“Convenience is not the driver [of e-commerce],” he said, adding that uptake of online purchasing is being seen among Gen X consumers as well as millennials as e-commerce spreads across a range of categories.

“Until recently our food had been untouched by digital behaviour. They continued to be bought in supermarkets and mum and pop stores. That is changing,” he said.

Ganesh Kashyap, director of e-commerce, Mondelez

“[Millennial] shoppers are now starting families of their own, and online shopping is multiplying. But why is this happening in food and beverage? It’s not a function of time. The answer lies in the relationship millennials have with their smartphones. It’s a smartphone addiction,” he said.

Kashyap pointed to research the company did in Shanghai into middle class families that found that young mothers were placing all of their orders for food “and everything else” online.

“I asked her why you did that, when there were mum and pop stores,” Kashyap said, referring to a conversation he had with a young Shanghainese stay-at-home mother of two children. “The answer is obvious. This young lady, from the time she gets up, to the time she goes to sleep, is connected to her smartphone. So it’s only natural that the last bastion of her life, food shopping, also shifts online.”

Kashyap then showcased a digitally-based campaign to revive flagging sales of Oreo biscuits among millennials in China. While the brand has 80% awareness in a country of 1.34bn and is loved by literally hundreds of millions of people, it is what Kashyap described as a “low involvement purchase,” an everyday pantry item historically bought by mothers for their kids.

Oreo“We had an opportunity to engage millennials and bring them back into the category, doing it online,” Kashyap said, before presenting the idea behind a campaign to enable Chinese millennials to create their own personalised boxes of Oreos.

“We knew millennials knew the brand, but to them there was nothing unique and interesting about it. We knew that to engage the millennial we needed to take the brand out of the normal grocery basket to a one-off destination purchase,” he commented.

“Chinese consumers online are looking for new and distinct experiences. And they’re demanding that these experiences are personalised,” he said.

Kashyap said that the biggest challenge for the campaign was “keeping it simple” and keeping the cost of personalisation down, adding that Mondelez had used digital printing to curb costs.

The campaign, which saw Mondelez tie-up with Alibaba to create an extension of online retail hub Tmall, led to 40,000 boxes of customised Oreos being sold in three days, and was so successful that Kashyap shared that the “personalisation agenda” is to be exported to other large markets including the US.

Kashyap and his team have been behind campaigns in APAC that have tripled online retail sales for Mondelez brands in 2015, and doubling them so far this year through partnerships with the likes of Alibaba in China and Coles Online and Woolworths in Australia.

“We’re not a company that makes life saving drugs. We’re not a company that produces staple groceries that you absolutely need. We’re a company that brings small moments of joy into people’s lives. That may sounds cliché, but I’m quite proud of it,” he told his audience at the beginning of his presentation.

However, at the end of his session, Kashyap did not entertainment a question about palm oil, and the reality that the more Oreo biscuits his company sells, the greater the levels of deforestation in Indonesia, which is the cause of haze pollution across Southeast Asia and a major contributor to climate change.

“The more [Oreos] you sell, the worse the haze gets. When will Mondelez start communicating its role in environmental haze and what it’s going to do about it?” he was asked.

“Ok, so as the e-commerce guy, I’m not the palm oil or the haze expert. So I’m not sure I can do that question justice,” he said before leaving the stage.

Mondelez is among the category leaders for converting to sustainably sourced palm oil, having announced a “palm oil action plan” in 2013 to clean up its supply chain, and declaring a year later that it had achieved its objectives for 100% sustainable palm oil two years early. However, no big user of palm oil can yet claim to have a completely green supply chain given the complexity of the issue.

Last year in Singapore, green group WWF launched the ‘We breathe what we buy’ campaign to urge consumers to switch to sustainably sourced palm oil. And last week, at the Content Asia Summit in Singapore, WWF’s head of communications challenged the broadcast industry to support the group in a campaign to take palm oil-buying companies to task over their role in the haze.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.



Sign up to our free daily update to get the latest in media and marketing