IWSR Drinks Market Analysis

IWSR predicts 42% global rise in ecommerce in 2020

30 November, 2020

According to new research released by IWSR Drinks Market Analysis, the value of alcohol ecommerce is forecast to increase by 42% this year, across 10 core markets, to reach US$24bn.

In comparison, alcohol ecommerce value in those same markets grew by 11% in 2019. The 10 core markets included in IWSR’s Global Ecommerce Strategic Study includes: Australia, Brazil, China, France, Germany, Italy, Japan, Spain, UK, and the US. Collectively they represent more than 90% of total alcohol ecommerce value.

“Consumers’ increasing proclivity for online purchasing has been driven by necessity in recent months, but these purchasing behaviours are here to stay,” said Guy Wolfe, strategic insights manager at IWSR.

“As brand owners increasingly invest in the channel, markets must be assessed on their own merits with a bespoke strategy developed. This is especially important as government regulations for alcohol ecommerce may evolve as the channel continues to grow.

“The forecast size and growth of ecommerce means it can no longer be viewed as merely an interesting niche. Online is now a market in its own right, and one that the IWSR forecasts to equal the Indian beverage alcohol market in value by 2024. The channel should therefore be given an equivalent level of focus and be fully integrated into route-to-market strategies.”

Alcohol ecommerce has grown in almost all markets this year, but some have experienced more rapid increases than others. China is currently the largest online alcohol market in the world, however, its growth rate (23% value growth, 2019-2020) has been slower than that of the US, UK, Australia and Brazil.

According to IWSR, this is because alcohol ecommerce is already reasonably well developed in China, allowing for less room for growth. IWSR consumer research shows that 46% of Chinese consumers who buy alcohol online have done so for several years.

After witnessing a value growth of over 80% in 2019-2020, the US is poised to overtake China to become the largest alcohol ecommerce market in the world by the end of 2021. Between 2019- 2024, US total alcohol ecommerce value will grow six-fold, from half that of China to nearly double.

Growth, however, is coming from a low base: in 2019, ecommerce represented just 1% of off-trade retail alcohol volume in the US. By 2024, IWSR estimates that ecommerce will account for 7% of total off-trade beverage alcohol volume in the country, compared to 6% in China.

The research also shows that although wine is the dominant ecommerce category in most countries, across the 10 core markets, ecommerce for ready-to-drink (RTD) products is predicted to represent 10% of total alcohol ecommerce value by 2024.

The US is the main market driving RTD category growth, and ready-to-drink products are set to represent 20% of US alcohol ecommerce value by 2024, compared to 5% in 2019.

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