Alcohol ecommerce growth moderates, but still set to outperform overall market

Monday, 12 February, 2024
IWSR, Serina Aswani
Value of ecommerce to increase by $7.5bn over the next five years across key markets, to reach nearly $40bn by 2027.

New findings from IWSR’s ongoing assessment of the alcohol ecommerce channel shows that beverage alcohol ecommerce is entering a period of normalisation following the Covid boom and subsequent post-pandemic correction, with sales in the world’s leading 16 markets 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. Nevertheless, this growth is expected to outpace that of total beverage alcohol across the 16 markets (on-trade plus bricks-and-mortar off-trade plus ecommerce), which is expected to see a value CAGR 2022-27 of under 2%.

The findings in the IWSR Ecommerce Strategic Study 2023 forecast that overall ecommerce 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, ecommerce 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,” says Guy Wolfe, Head of Ecommerce Insights, 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,” says Wolfe. The overall proportion of consumers shopping online is down, but those who continue to do so are increasing their frequency.

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