Why does China’s ecommerce growth continue to defy channel norms?

Wednesday, 8 May, 2024
IWSR, Serina Aswani
IWSR analyses the growth trajectory of alcohol ecommerce in China compared with other key markets.

Of the world’s largest alcohol ecommerce markets, the only one in which ecommerce alcohol shopping frequency continues to reach new heights is China. The development of the D2C and on-demand channels have been key here, while the removal of Covid restrictions in late 2022 further boosted online sales.

Growth has also been driven by China’s online buyer market penetration: more than half (53%) of all alcohol buyers shop online – almost double the incidence seen in any other major market. Additionally, IWSR data shows that 83% of non-users of the channel surveyed in 2023 said they were somewhat or very likely to buy alcohol online in the future, up from 71% in 2022.

Compare this with the US, where the online buyer penetration is only 14%. Interestingly though, the US remains the second most valuable ecommerce market, and will continue to deliver some of the most growth globally, although at a lowered level due to a weak macro-economic environment and normalising consumer behaviours.

What, then, keeps China’s ecommerce channel growing at such a high rate?

Online alcohol sales in the country expanded at a value CAGR of +16% between 2018 and 2022, building a 39% share of global ecommerce sales; IWSR forecasts a 2022-27 CAGR of +6%, increasing the global share figure to 40%.

China’s forecast absolute value growth is well above that of any other market. This is partly due to consumers’ ongoing enthusiasm for the channel, which was not simply a Covid-induced anomaly as in some countries. In addition, ecommerce momentum is being sustained by considerable retailer innovation.

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