In 10 major countries (Australia, Brazil, China, France, Germany, Italy, Japan, Spain, UK and the US), online sales are continuing to grow at a rate of 15% per year, versus total trade growth of 1% per year, according to a new report from ISWR.
Online sales are expected to reach more than $45.5bn globally in the next five years, the study adds. Currently, China has the biggest online market for alcoholic drinks mainly driven by its national spirit, baijiu, followed by France and the US.
Though complicated liquor laws and the 3-tier distribution system create restrictions for online liquor sales in the U.S., volume of online beverage alcohol purchase was about 21 million nine-liter cases last year. It is forecast to grow by almost five times that amount by 2024 to reach 101.2 million nine-liter cases, with an estimated value of $13.4bn.
“Online shopping in the US is a $755 billion industry, and though alcohol represents a relatively small portion of that today, it’s expected to explode in the coming years,” says Adam Rogers, North America Research Director at IWSR Drinks Market Analysis.
“Clearly, beverage alcohol brands and retailers should have strong e-commerce strategies in place to profit from this important shift in consumer purchase preference.”
Among US consumers of legal drinking age who purchase and drink alcohol regularly, over half buy alcohol online at least once a week (and 79% of people who purchase alcohol online cite the reason as “a treat for myself”).
Having regular brands available, home delivery, and a reliable online retailer are valued as most important to US consumers, the study found. Almost three-quarters of US consumers are willing to pay more for drinks online, versus buying them in a store, with Amazon and Wine.com cited as the most popular sites in the US for purchasing alcoholic drinks online.
Wine commands the majority share (54.5%) of beverage alcohol e-commerce, due to the looser regulatory environment for online wine sales compared with spirits and beer.
Sparkling wine and champagne increased share last year, at the expense of still wine. As for spirits, demand fluctuates by the type of e-commerce channel used, but whisky generally dominates and has continued to increase its share, largely at the expense of vodka. Also, hard seltzers and prepared cocktails more than doubled their e-commerce market share in 2018, ISWR reports.