GLOBAL – Nigeria and South Africa are among 16 key markets where total ecommerce sales of beverage alcohol are expected to contribute an additional US$10bn+ to the beverage alcohol market, over the next 5 years to reach nearly US$40bn by 2026, according to new IWSR findings.
The other markets include Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, Netherlands, Spain, the United Kingdom, and the United States.
“Having surged through the pandemic, alcohol e-commerce sales are set to moderate over the next few years. However, the channel is still a key growth contributor for the total beverage alcohol market,” notes Guy Wolfe, Strategic Insights Manager, IWSR Drinks Market Analysis.
“Almost all volume gains in the total off-trade between 2021 and 2026 will come from e-commerce, despite slowing growth rates.”
As costs of living increase, IWSR says there are early signs that online shopping behaviors are shifting in favor of trusted brands and strong value propositions in some markets and categories.
However, e-commerce remains a channel for seeking unusual and rare items, and the premium segment is likely to be better insulated from such pressures.
IWSR highlights that convenience will be an ongoing driver for e-commerce sales, whether it is for ‘treating’ oneself or for ‘replenishing’ stocks.
The alcoholic market analysis firm notes that the less developed market of e-commerce, such as Mexico and Nigeria, will see a more rapid development from a lower base for the category.
Meanwhile, China and the US will take the center stage in much of the channel’s growth during the forecast period.
As the US will generate the most added value in the coming years, China will retain its leading position, IWSR reports.
In the same forecast period, spirits drinks will contribute the most value to the e-commerce channel even as the beer continues its rapid gain of share of total e-commerce alcohol as the major brewers increase their capabilities in this channel.
The spirits category is expected to account for nearly half of all online sales by 2026. No-alcohol spirits, Indian whisky, and Irish whiskey categories will show the fastest online growth across the focus markets, though they will remain relatively small.
In the beer category, cider and RTDs are projected to register the quickest growth over the next five years, and by 2026, these drinks are expected to account for nearly a quarter of online sales. Wine, the most established category online, will see its share of e-commerce sales slip to under a third by 2026.
Trading the alcoholic beverage, the omnichannel, which includes retailers that offer B&M sales at the forefront, is set to account for US$3 of every US$10 spent on beverage alcohol online by 2026.
Withal, the on-demand subchannel will continue to make headway over the next few years but will face increasingly difficult trading conditions and logistical challenges to fulfill super-fast delivery promises.
In a recent market report published in July, IWSR noted that the importance of delivery speed has risen as consumers increasingly expect, and show a willingness to pay for rapid fulfillment even though meeting this demand is also becoming a much greater challenge.
Willingness to pay more for the convenience of delivery within one hour of ordering is strongest in the US and China, followed closely by Brazil.
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