IWSR Drinks Market Analysis has released new findings from its ongoing assessment of the alcohol e-commerce channel, showing it is entering a period of normalisation following the Covid boom and subsequent post-pandemic correction.
Sales in the world’s leading 16 markets are expected to grow at a slower pace to reach just under US$40bn by 2027. That represents a 2022-27 value CAGR of +4.5% – compared to the +31% CAGR recorded between 2019 and 2021.
The findings in the IWSR E-commerce Strategic Study 2023 forecast that overall e-commerce value share of total beverage alcohol (TBA) will stabilise at around 4%-4.5%. Previously, the share figure had risen from 2.1% in 2018 to 3.7% in 2021.
“After the pandemic boom, e-commerce value saw a slight correction in 2022 (-2%) as restrictions in most markets were removed and shoppers returned to the on-trade and to bricks-and-mortar stores,” said Guy Wolfe, Head of E-commerce Insights at IWSR. “In the near term, online growth will pick up but remain depressed by a weak macro-economic outlook, before a return to steadier growth from 2024.”
According to the findings, while 24% of alcohol buyers in 2022 said they had made online purchases in the past six months, in 2023 that figure declined to 17% – accompanied by an increase in the use of physical supermarkets/grocers, and the on-premise.
But, for those who still buy alcohol online, frequency has increased across all markets, although the pace of growth here has diminished compared to prior years. The exception is China, where online purchasing frequency is still accelerating, thanks in part to the lingering impact of Covid restrictions on the supply chain.
“In the post-Covid environment, the behaviour of alcohol buyers is evolving in different directions,” said Wolfe. “The overall proportion of consumers shopping online is down, but those who continue to do so are increasing their frequency.
“This indicates that the channel is shedding ‘transient’ users who only adopted it out of necessity during the pandemic, but also maintaining or even gaining appeal among e-commerce loyalists.”
While more modest growth is now expected to come from online alcohol sales in the future, with a corresponding return to more traditional purchasing channels, e-commerce should nonetheless remain a key priority for brand owners.
Wolfe concluded: “Online sales value is still forecast to outperform TBA to 2027. Furthermore, consumer research conducted by IWSR in Q3 2023 confirms that the digital space is a crucial source of information, influence and engagement for buyers across all channels.
“E-commerce therefore remains a key element within the big picture of total value.”
