IWSR has predicted significant growth for online retailers, expecting total beverage alcohol e-commerce sales to grow by 66 per cent in the next five years.
Total e-commerce sales across 16 key markets examined by the IWSR (Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, Netherlands, Nigeria, South Africa, Spain, the United Kingdom and the United States) are expected to reach US $42bn by 2025, a growth of two-thirds.
Guy Wolfe, IWSR Strategic Insights Manager, said: “E-commerce has clearly become engrained for many consumers, cementing its place as the third sales channel for beverage alcohol purchase.”
The research also found that globally, about 25 per cent of alcohol drinkers report purchasing beverages online, with two-thirds making their initial purchase prior to the pandemic.
Nevertheless, the pandemic has been a significant driver of e-commerce growth worldwide, with sector value increasing by nearly +43 per cent in 2020, versus a growth of +12 per cent in 2019.
By 2025, IWSR projects e-commerce to constitute about six per cent of all off-premise alcohol sales by volume, tripling the 2018 figure of two per cent. IWSR expects the greatest value growth to come from the US, which is currently expanding at 20 per cent annually and is predicted to become the top global market for online alcohol purchases.
IWSR also looked at the various channels and business models being used in the e-commerce space. Australia’s market had the largest proportion of value from ‘Online Specialist’ retailers, a channel that IWSR has identified as “traditional e-commerce”, which includes websites often used by older customers looking for trusted brands and low prices, and who don’t mind waiting for delivery.
These traditional channels stand in contrast to “modern e-commerce,” which includes in-app marketplaces and on-demand channels, preferred by younger customers who are more willing to pay for premium brands and the convenience of rapid delivery.
Wolfe explains: “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.”
Wine remains the largest alcoholic drink category in most markets’ e-commerce trade, though beer, cider and RTDs are tipped for strong growth by IWSR.