The latest research by IWSR shows alcohol ecommerce across global key markets continued to grow with new app-driven business models during the pandemic. In fact, global alcohol beverage ecommerce is projected to grow 66% to US$42 billion over the 2020-2025 period.
The largest online shopper group comes from China but the US is forecasted to top the alcohol ecommerce market by 2025.
According to IWSR’s research, the alcohol ecommerce value rose by around 12% in 2019, and further climbed up by around 43% in 2020 in the height of the pandemic.
Carrying on the rising trend, the total beverage alcohol ecommerce sales of the world’s key markets are expected to grow by 66% and reach more than US$42 million by2025. By then, the global e-commerce sector is also projected to represent about 6% of all off-trade beverage alcohol volumes, up from less than 2% in 2018.
Consumer research conducted by IWSR found that around one-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%).
China, which currently accounts for a third of total ecommerce value, is expected to expand less rapidly, but still contribute substantial value.
Based on the US’s average annual growth of about 20%, the research forecasted that the US will record the greatest alcohol ecommerce value growth and become the top market for online beverage alcohol among the above markets.
The 16 focus markets examined by the research includes Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, Netherlands, Nigeria, South Africa, Spain, the United Kingdom and the United States.
New business model driven by young drinkers
The diversified online business models have contributed to the rapid growth of alcohol ecommerce as they allowed consumers to shift between channels and retailers flexibly. IWSR pointed out that the online beverage alcohol space can now be divided as more ‘traditional’ or ‘modern’.
More ‘traditional’ ecommerce often refers to omnichannel or online specialists which can be accessed via websites. They are commonly used by older consumers to search for good prices and known brands. In terms of shopping behaviour, they are prepared to wait for delivery.
For more ‘modern’ ecommerce, it refers to app-driven channels which are often on-demand or marketplaces. They are used by consumers with younger legal drinking age who are paying for rapid delivery and searching for interesting or premium brands.
As ecommerce has emerged as the third sales channel for beverage alcohol purchase, Guy Wolfe, Strategic Insights Manager of IWSR Drinks Market Analysis commented, “Given the pandemic and overall changing consumer shopping behaviour, it’s certainly not surprising that alcohol ecommerce 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 ecommerce and what their priorities are,”
Wine tops the alcohol ecommerce sector
IWSR findings show that wine is the largest major alcoholic drinks category in most market’s ecommerce, accounting for 40% of total value, except for China, Colombia, Mexico and Nigeria where spirits led the online sales by value.
Although beer, cider and RTDs are currently occupying less than one-fifth of total ecommerce value, these categories are expected to grow strongly over the next five years and gain share mainly from wine.