Over the next five years, total beverage alcohol e-commerce sales across key global markets are expected to grow by 66% to reach more than $42bn, according to an e-commerce study published by IWSR Drinks Market Analysis.
Among the 16 focus markets examined in the IWSR’s report (Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, the Netherlands, Nigeria, South Africa, Spain, the UK and the US), e-commerce value increased by about 12% in 2019, and then by almost 43% in 2020 during the height of the pandemic. Looking ahead to 2025, e-commerce is projected to represent about 6% of all off-trade beverage alcohol volumes, compared to less than 2% in 2018.
The greatest forecast e-commerce value growth will come from the US, thanks to average annual growth in the country of about 20%, which will see it become the top global market for online beverage alcohol. China, which currently accounts for a third of total e-commerce value, is expected to expand less rapidly, but still contribute substantial value.
The study also found that online business models for alcohol sales are becoming more diverse, leading consumers to increasingly shift between channels and retailers according to their specific needs at any given time. In general terms, the online beverage alcohol space can be perceived as two distinct, but overlapping, worlds: more ‘traditional’ e-commerce – often omnichannel or online specialists – accessed via websites and used by older consumers seeking good prices and known brands and who are prepared to wait for delivery; and more ‘modern’ app-driven e-commerce – often on-demand or marketplaces – used by younger legal-drinking-age consumers willing to pay for rapid delivery and looking for interesting/premium brands.
“Given the pandemic and overall changing consumer shopping behaviour, it’s certainly not surprising that alcohol e-commerce is growing very quickly. But what’s interesting is to see the significant variations that have developed both across and within markets in how different consumer groups shop via e-commerce and what their priorities are,” says Guy Wolfe, strategic insights manager at the IWSR. “E-commerce has clearly become ingrained for many consumers, cementing its place as the third sales channel for beverage alcohol purchase.”
Consumer research conducted by the IWSR found that around a quarter of alcohol drinkers across the globe report buying alcohol online, with two-thirds having made their first purchase pre-pandemic. China has the highest proportion of online shoppers among all beverage alcohol buyers, at nearly 60%, and the US has the highest proportion of online buyers who made their first purchase during the pandemic (54%).
In most markets, wine is the largest major alcoholic drinks category in e-commerce (representing about 40% of total e-commerce value), with notable exceptions being China, Colombia, Mexico and Nigeria, where spirits lead online sales by value. Although currently accounting for less than a fifth of total e-commerce value, beer, cider and RTDs are expected to grow strongly over the next five years, gaining share mainly from wine.
