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UK one of the most “mature” markets for alcohol online, despite accounting for less than 10% of sales

Published:  05 September, 2018

The UK is at the forefront of selling wine online thanks to well-established specialist wine retailers such as Majestic and The Wine Society, new research has revealed.

According to a new e-commerce study from the IWSR, both France and the UK have the “most developed ecommerce sectors” globally for alcohol.

Wine and beer are purchased “relatively frequently” as part of the online grocery shop in the UK, with Tesco and Asda leading the pack in terms of online drinks sales.

China meanwhile represents the biggest opportunity in terms of sales.

The country’s e-commerce market for alcohol is worth $6.1bn - four times the size of the US, and three times the size of the next-largest markets of France and the UK.

Alcohol online however, still only plays a small role in the context of wider alcoholic sales.

In the US, online sales represent just 1% of off-premise alcohol sales, although growth is in double-digits as consumer demand increases and state and federal level restrictions on alcohol distribution ease slightly.

France’s online share is the highest at nearly 9%.

The IWSR put France's success online down to the development of the 'click-and-drive' model by major supermarkets such as E. Leclerc and Carrefour and a “thriving” online wine sector, with over 400 specialist ecommerce sites.

Analysts who spearheaded the study concurred that online purchase frequency for alcohol is low in most markets.

“Only China and the UK have more than 50% of consumers purchasing at least once a month,” the IWSR said in a statement. 

Elsewhere this month, analysts have drawn attention to the fact that bricks and mortar stores are fighting back amid a slowdown of growth in the online grocery channel.

According to Jo Smith, business development director UK at Kantar, online FMCG sales including alcohol represented 7% of UK grocery spend in the year to May 20.

But growth in this channel has “dropped considerably at a time when physical stores held their growth. We could arrive at a point where the growth from physical stores outstrips that of online,” she says.

Smith attributes the online slowdown largely to the fact that e-commerce platforms are struggling to keep up with the agile habits of modern shoppers – namely asking consumers to commit to a minimum spend.

While the IWSR said the primary motivating factor across most markets for buying alcohol online is "convenience, ahead of price", it seems online retailers have some way to go to perfect the top up shop or "small basket" trip, which account for three quarters of total alcohol spend.

“Top-up shopping is very pertinent with alcohol,” said Andy Crossan, Kantar’s consumer insight director. “It’s one of those categories where it’s dependent on shorter or a specific journey for a smaller number of items, which is why alcohol tends to struggle online. Whether e-tailers can crack that will be very important for online alcohol sales going forward.”

More on the topic of impulse purchasing and online shopping in Harpers’ September issue, being published this Friday.