IWSR reveals e-commerce channel set to outperform total alcohol market

December 15, 2023
By Melissa Parker

Alcohol e-commerce is poised for growth that surpasses the overall market, as highlighted in the IWSR’s Ecommerce Strategic Study 2023.

The study projects a $7.5 billion increase in the value of the e-commerce channel across key markets over the next five years, reaching nearly $40 billion by 2027.

Surveying ten core markets and six secondary markets, constituting 90% of global e-commerce alcohol sales, the study conducted consumer research in markets including Australia, Brazil, China, France, Germany, Italy, Japan, Spain, the UK, and the US.

The findings indicate a normalisation period for beverage alcohol e-commerce following the post-Covid boom and subsequent correction.

Sales in the leading 16 markets are expected to grow at a slower pace, achieving just under $40 billion by 2027, reflecting a 4.5% value CAGR from 2022 to 2027, compared to 31% CAGR recorded between 2019 and 2021.

This anticipated growth is expected to outperform the total beverage alcohol market across the same 16 markets, which is forecasted to have a value CAGR of under 2% from 2022 to 2027.

The study suggests that the overall e-commerce value share of total beverage alcohol will stabilise at around 4%-4.5%, following an increase from 2.1% in 2018 to 3.7% in 2021.

Guy Wolfe, Head of E-commerce Insights at IWSR, notes that after the pandemic-induced surge, e-commerce experienced a slight correction in 2022, but online growth is expected to pick up in the near term. However, a return to steadier growth is anticipated from 2024 onwards.

While the percentage of online consumers has decreased, those who continue to do so are increasing their frequency.

This shift suggests a shedding of “transient” users who adopted e-commerce out of necessity during the pandemic while maintaining appeal among e-commerce loyalists.

Despite expectations of more modest growth in online alcohol sales and a return to traditional channels, e-commerce remains a key priority for brand owners.

Wolfe emphasises that online sales value is forecasted to outperform the total beverage alcohol market until 2027, as confirmed by consumer research in Q3 2023, indicating the digital space’s importance for information, influence, and engagement.

Additional findings from the IWSR Ecommerce Strategic Study 2023 include the expectation that a significant portion of the absolute value growth of e-commerce alcohol will come from China and the US.

The rise of beer and agave-based spirits is also highlighted, with beer anticipated to expand fastest.

Furthermore, online alcohol shoppers invest more time in pre-purchase research than those buying through traditional channels, emphasising the importance of tailored digital engagement for brand owners.

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