In many markets around the world, ecommerce is universally seen as a key tool to counteract the demise of on-premise sales and in some cases, severe restrictions to brick-and-mortar locations. The latest IWSR Covid-19 Bi-Weekly Report shows that in countries where the alcohol ecommerce environment was previously under-developed, Covid-19 has spurred industry stakeholders to invest in and develop this channel, both on a rudimentary and professional level.
IWSR’s team of on-the-ground analysts share their insights on how the pandemic has pushed ecommerce channel development in several markets around the world.
In France, strong growth in ecommerce persists. ‘Drive’ (click & collect) services are growing very strongly and categories previously underperforming here, such as beer and spirits, are now over-indexing vs. last year, but this should be placed in the context of the channel’s limited importance compared to both on-trade and brick-and-mortar retail. The former is currently nonexistent, and the latter continues to decline.
Italy’s ecommerce environment was not ready for the changes Covid-19 brought about. However, in the past weeks, the channel has seen particularly strong growth in D2C, fueled by on-premise wholesalers branching out into this underdeveloped channel. Ecommerce has risen from around 2% to 4% of total grocery sales (and lower for alcohol) but is now believed to have peaked, due to limitations of infrastructure and capacity despite growth in D2C.
In India, for the first time ever, there are now advanced talks to allow for a degree of alcohol ecommerce. This would run in conjunction with licensed brick-and-mortar outlets and India’s thriving e-tailer platforms, which to date have been prevented from offering alcohol. This may help provide tax income for Indian states, while also avoiding overcrowding in and around the sparse number of currently-licensed outlets which has been in evidence when some shops reopened in the first week of May.
In Argentina, strict lockdown measures mean ecommerce offerings are being rapidly developed, especially for people who aren’t able to visit supermarkets or obtain an online delivery slot. Many brand owners, especially those of larger beverage alcohol companies, have partnered with existing delivery services, such as Rappi, Glovo, Uber or PedidosYa, or have developed their own proprietary ecommerce apps if able to do so. Some brand owners have also taken to social media platforms to advertise that they will personally deliver beverage alcohol purchases directly to the consumer. Others have also partnered with restaurants and bars that have started delivery services as an additional revenue stream.
As governments begin to ease movement restrictions, consumers may start to gradually leverage additional channels for their alcohol purchases. For example, ecommerce greatly benefited from strict movement restrictions in China. However, as restrictions started to ease, there has been some return to brick-and-mortar retailing at the expense of ecommerce. The gradual reopening of restaurants is providing consumers with additional alternatives as well.
Nonetheless, the channel will likely still play a pivotal role in markets around the world; consumers are unlikely to return to pre-crisis behaviour as soon as restrictions are lifted. Mark Meek, IWSR CEO, also adds, “many people will be exploring home delivery services and ecommerce services for the first time during lockdown and social distancing. Consumption habits formed now may stick around in the future.” Even if consumers who used to go out and shop do not completely switch to ecommerce going forward, the channel will have increasing importance in how companies operate in the future.
The findings from this article are based on IWSR’s report series examining the impact of Covid-19 on 10 key markets. This report series is updated every two weeks, in order to help the beverage alcohol industry stay on the pulse of the impact of the pandemic around the world. This report series is available complimentary for current subscribers to the IWSR Global Database.
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