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Ecommerce set to swell alcohol sales, even as growth slows

Published:  13 December, 2023

The value of alcohol e-commerce is set to see slowed growth over the next five years as sales normalise following Covid. However, value is still forecast to increase by a hefty $7.5bn as online growth continues to outstrip traditional sales.

The findings, as reported in the IWSR’s E-commerce Strategic Study 2023, show that alcohol e-commerce sales will reach nearly $40bn by 2027 across 16 key markets.

This growth marks a slower pace for the sector, which is beginning to stabilise following the Covid boom and subsequent post-pandemic correction.

However, while the pace of growth slows, the rise of e-commerce is set to outperform the rise in traditional retail: the 2022-27 value CAGR for e-commerce is expected to be 5% versus traditional retail, including the on-trade and bricks-and-mortar sales, which is expected to will be 2%.

“In the post-Covid environment, the behaviour of alcohol buyers is evolving in different directions,” Guy Wolfe, head of e-commerce insights at the IWSR, said.

“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.”

The uptick in frequency of purchasing online is another reason for optimism. Although sales in the world’s leading 16 markets are expected to grow at a slower pace than 2019 to 2021 (when growth soared 31%, CAGR), for those who still buy alcohol online, frequency has increased across all markets.

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.

“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 bricks-and-mortar stores,” Wolfe added.

“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.”