China’s alcohol e-commerce industry worth $6.1bn

Online alcohol sales in China have reached US$6.1 billion – four times higher than the US and growing at around 15% per year, according to a new study by the IWSR.

Online alcohol sales have reached US$6.1bn in China, according to a IWSR report

As found in the IWSR Ecommerce Study: A strategic roadmap for alcoholic beverages – a 12-month consumer survey leading up to the first quarter of 2018 – China has the largest e-commerce market for alcoholic beverages, followed by France and the UK.

Of the 10 countries researched as part of the study, France and the UK were found to be the “most mature” markets with the highest percentage of off-trade sales derived from e-commerce activity.

France’s online share of off-trade alcohol sales is almost 9%, attributed to the “successful development” of the ‘click and drive’ model by leading supermarkets such as E Leclerc and Carrefour.

In the UK, wine and beer are purchased “relatively frequently” as part of online grocery shopping, with supermarkets Tesco and Asda being leading players in online alcoholic drinks sales.

Furthermore, the IWSR’s 2018 e-commerce consumer survey showed that online purchasing frequency is “low in most markets”. Only China and the UK had more than 50% of consumers purchasing alcohol online at least once a month.

Convenience continues to be the number one motivator when it comes to buying alcohol online, the report said.

The IWSR also noted Amazon plugging a gap for online alcohol sales, particularly in Germany where the company already commands a 50% share. It is also improving its position in Japan, the UK, Spain and Italy.

Across the 10 markets analysed in the study, the IWSR expects online alcohol growth rates from 2017 to 2020 to range from 9%-10% in mature markets such as France and the UK, and by as much as 20%-40% in less-developed e-commerce markets.

Key priority

Speaking to The Spirits Business last month, Pernod Ricard said e-commerce remains the “fastest-growing channel” for the French drinks group.

“E-commerce remains the fastest-growing channel for Pernod Ricard and a key priority,” said Julie Laurens, global head of e-commerce at Pernod Ricard. “We have already achieved 20% growing pace two years ago. Today, we are above and accelerating our growth rate across the 60 markets that are selling our products online.

“In terms of geographies, the key markets remain China, the United States, France and the United Kingdom. In terms of outlook, great opportunities arise in Southeast Asia, Latin America and Sub-Saharan Africa that all look very promising.”

Laurens added that e-commerce represents around 7% of Pernod Ricard’s business in the UK and around 10% in China.

To enhance its e-commerce presence, Pernod Ricard established an initiative called Wecommerce – a library of “ready-to-use” content pages for its brands. Already available in 29 countries, the platform provides “fully-localised” online content, in local languages.

The company has also created an online category brand to help “better sell our portfolio with the consumer in mind”, called Drinks&Co.

“We believe that it is crucial to provide a differentiating offer beyond just selling products,” Laurens added. “We are looking at services, such as on-demand delivery with key partners in that space.”

For an in-depth look at the alcohol e-commerce industry, see the Big Story in the September issue of The Spirits Business magazine.