The Fast-Moving Consumer Goods (FMCG) sector spanning, retail, consumer durables, healthcare products, and personal services is one of the largest and most dynamic contributors to the global economy. The sector, which accounts for around 12% of global GDP is entering a highly disruptive and dynamic phase. Valued globally at USD 12.93 trillion in 2024, it is projected to reach USD 21.9 trillion by 2034, growing at a compound annual rate of 5.40%, according to expertmarketresearch.com. This seismic expansion is being fuelled by urbanisation, shifting consumer behaviour, the rise of digital commerce and the adoption of artificial intelligence (AI).
“AI and data are no longer optional tools, but rather strategic imperatives shaping the next generation of winners across global, African, and South African FMCG markets,” says Mpho Dube, Director, Consumer Sector, Absa CIB.
Global FMCG Growth Driven by Data, AI, and Consumer Trends
E-commerce, artificial intelligence (AI), and changing consumer trends are influencing the global FMCG market. AI is used in personalised marketing, dynamic pricing, and customised products. Health-oriented products are contributing to growth within food and beverages, the largest segment of the sector. The global generative AI market is projected to increase from USD 7.9 billion in 2023 to USD 57.7 billion by 2033, driving product development, trend forecasting, and consumer engagement (Market.us,2024).
South Africa: Complexity Meets Innovation
In South Africa, the FMCG sector demonstrates both significant potential and ongoing challenges. According to BusinessWire.com, retail sales hit R1.4 trillion in 2023, with the FMCG sector accounting for R845.6 billion. Modern trade channels, comprising corporate-owned supermarkets, hypermarkets, discounters, and convenience stores, accounted for R452 billion. Informal trade generated R184 billion, driven by township spaza shops, hawkers, and independent convenience outlets, which function as key pillars of local economies and promote economic inclusion. The remaining R209 billion originated from pharmacies and health & beauty chains, liquor outlets, wholesale and cash & carry operators, and direct selling networks. These categories play critical roles within the market landscape. Pharmacies and wellness retailers represent high-margin growth opportunities, while wholesale and cash & carry operations are essential to supplying township markets.
Discounters such as Boxer, Usave, and SaveMor experienced year-on-year growth of 13.9%. E-commerce also showed robust expansion, rising by over 40%, led by platforms such as Checkers Sixty60, PnP asap!, SPAR2U, and Woolies Dash. The latest Absa Merchant Spend Analytics reports online spending maintained strong double-digit growth at 23%, with its share of total card spending increasing from 7% in YTD August 2022 to 11% in YTD August 2025. The food category consistently held a large share of online spending, growing from 19.8% in YTD August 2022 to 22.5% in YTD August 2025, underscoring the importance of online grocery and food delivery services.
Supermarkets continue to dominate the retail landscape, with premium formats outperforming value chains, and informal retail expanding by 5.2% due to the convenience they offer. Although the industry has experienced consistent growth, households remain under financial pressure. Food inflation eased to 4.5% in 2024 from 10.8% in 2023; however, the cost of a basic food basket is still 26% higher than in 2021. These economic challenges have led to notable changes in consumer behaviour, including reduced basket sizes, increased shopping frequency, and greater evidence of trading down. Absa’s internal data further shows a general slowdown in card activity, suggesting cautious consumer spending and tighter household budgets.
Between H1 2022 and H1 2025, the average transaction value (ATV) stayed negative for four consecutive periods, improving modestly from -5% to -3%. Despite this, transaction volumes have continued to surpass value growth, indicating a shift toward lower-value purchases. This pattern highlights consumers’ preference for smaller, more frequent shopping trips as they manage tighter budgets.
“With this backdrop, AI and data are becoming critical. Predictive analytics is sharpening demand forecasts, improving stock planning, and optimising merchandising strategies. Digitally enabled supply chains are enhancing efficiency in last-mile delivery which is an essential capability for township inclusion. These innovations are helping FMCG players balance cost pressures, preserve consumer value, and sustain market reach”, says Dube.
Rest of Africa: Youth, Urbanisation, and Digital Leapfrogging
Beyond South Africa, the African FMCG story is defined by youthful energy, rapid urbanisation, and digital reinvention. Valued at approximately USD 346 billion today, the market is projected to reach USD 568bn billion by 20323 (verifiedmarketresearch.com). Africa’s greatest advantage is its demographics: 60% of the population is under 25, giving the continent one of the world’s largest and youngest consumer bases.
Urban migration is changing diets and boosting demand for packaged goods and personal care products, creating growth for branded FMCG. Africa stands out with its mobile-first approach, leading in mobile payments as seen with M-Pesa, which helps overcome weak infrastructure and expands the consumer base. This leapfrogging also accelerates retail, with digital platforms enabling direct-to-consumer sales and linking brands to homes and informal retail making up as much as 80% of FMCG sales in some markets. Despite challenges like poor infrastructure, currency instability and fragmented data, these issues are driving innovation. Companies are leveraging AI to address structural barriers, with mobile commerce platforms using it for product recommendations, inventory management, and retailer loyalty (EMR, 2025).
The Future Is Intelligent and Inclusive
The FMCG sector is at a pivotal moment. As global and African markets evolve, the integration of data and AI is not just enhancing efficiency, it is redefining competition, consumer engagement, and operational agility. “At Absa, we see this as the future of inclusive innovation where technology meets purpose to build stronger, more connected economies,” concludes Dube.


























