IWSR: China leads global online alcohol consumption

China has become the world’s largest e-commerce market for alcoholic beverages, valued at US$6.1 billion, four times the size of that of the US , according to the latest report by IWSR.

With around 772 million Internet users, the country’s online alcohol sales are growing annually at 15% per year, according to the IWSR’s e-commerce study, entitled: ‘A strategic roadmap for alcoholic beverages’. 

The Chinese online alcoholic beverage market is concentrated, with the leading two players, Tmall and JD,com, sharing over 70% of the market between them. The combined share of these players is three times the size of the entire US online alcoholic beverage channel, says IWSR.

The country’s online alcohol market is also three times the size of the next-largest markets of France and the UK, according to the report. However, France and the UK are the most mature, taking the highest percentage of off-trade sales derived from e-commerce activity. 

In the US, at present, online sales represent only 1% of off-premise beverage alcohol sales, but are growing at double-digit rates as consumer demand increases and state and federal level restrictions on alcohol distribution out-of-state ease slightly.

France’s online share of its off-premise alcohol sales is the highest at nearly 9% due to the successful development of the ‘click-and-drive’ model by the major supermarkets such as E. Leclerc and Carrefour, according to the report. In addition, there is a thriving online wine sector, with over 400 specialist e-commerce sites.

In the UK, wine and beer are purchased relatively frequently as part of the online grocery shop, with Tesco and Asda being the leading players in online alcoholic drinks sales. There are many well-established specialist wine retailers such as Majestic and The Wine Society, who have fast-growing online operations.

The IWSR’s 2018 e-commerce consumer survey shows that online purchase frequency is low in most markets, with only China and the UK having more than 50% of consumers purchasing at least monthly or more. The primary motivating factor across most markets is convenience, ahead of price.

Amazon has quickly filled the gap in markets where there has been little impetus from existing retailers to move into e-commerce. This is the case in Germany, where it already has more than a 50% share. Amazon is also making gains in other major markets, including Japan, the UK, Spain and Italy.

Wine is the major alcoholic beverage category sold online, typically with 60% to 70% share of online beverage alcohol sales. Jack Daniel’s leads the pack in terms of online alcoholic beverage brands and the leading beer brand in the IWSR survey was Heineken. Both are well-recognised global brands with strong digital marketing support, which is deployed at a global and country level.

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