Online Wine Stores in the US vs. Europe & China

By American Wine Appassionata September 23, 2016

Online Wine Stores in the US vs. Europe & China

Who is the online wine buyer, do you fit the profile?

 The global online wine market is worth around $6 billion and continues to grow at an impressive rate of more than 30 percent annually.

Online wine sales in the United States have been increasing at double-digit rates for the past five years. More than 90 percent of wine is sold in grocery stores, liquor stores, restaurants and other brick-and-mortar outlets. Wine remains under-penetrated online at less than 2% all U.S. wines sales, while Europeans purchase around 8% to 10% of their wine online. Other online categories such as apparel, shoes and small electronics have had greater success, despite the obvious concern of fit and style. 

One reason for the slow growth in U.S. online wine sales is the complicated tangle of shipping regulations that differ state by state. In the U.K. for example, where shipping rules are more uniform, online wine sales are currently at 15%. Surveyed U.S. wine buyers also cited other concerns such as high shipping rates, online security worries and logistical issues such as signature requirements and temperature during shipping. Also, some online wine buyers who are not familiar with a specific wine offered fear the possibility that they may not like it, and then will be faced with the difficult task of returning.

A new study by researchers at California Polytechnic University in San Luis Obispo shed some light on these online wine consumers. Researchers discovered that online wine buyers are more likely to be male, over the age of 40, married with children, have a higher household income and relatively affluent. He is also technologically savvy. 80 percent of online wine buyers own a smartphone. Thirty percent of those surveyed said they searched for wine using a smartphone, although only 12 percent had purchased with a mobile device. They also tend to be wine enthusiasts and spend more on wine than non-online buyers.

It is official Americans like fruity red wine

take a look at the graph below and you'll quickly relize that americans favor fruity wine over sweet wine. that was not the case less than a decade ago where top selling wine were mostly sweet and less dry. Top selling wine varietal in the US was Chardonnay followed by Cabernet Sauvignon less than 4 years ago.

American Wine Consumer Wine preference-www.allvino.com

Despite the fact that global online wine sales topped $5 billion in 2012, “that represents less than 5 percent of total wine sales worldwide,” said Bressolles, adding that it will continue to expand. 

In France, online wine sales reached $712 Million in 2012 and that's set to rise to $940 Million, according to estimates from the Bordeaux Management School (BEM). Gregory Bressolles, professor of marketing at BEM, disclosed the figures during a seminar at Bordeaux-based wine fair Vinexpo.

In China, a new Wine Intelligence report suggests that almost half of wine drinkers buy online, making it the world’s largest and fastest growing e-commerce market. JD.com Inc., No. 1 in the Internet Retailer China 500, reported that it had sold 22 million bottles of wine in 2015, more than double what it sold in 2014. Also, wine is a hot category for many e-retailers in China. Amazon’s China division, Amazon China, No. 4 in the Internet Retailer 2016 China 500, had reported that its sales of imported wines grew 550% and average order value on wine products increased 40% in 2015. Almost 30% of all wine sold in China is online.

Most online Wine buyers generally seek higher quality wines from recognized appellations and prefer family-owned or small wineries. They are also tech savvy and are more likely to use phone apps to research wine information. Surprisingly most of these online wine consumers do not use Facebook, Twitter or blogs any more than non-online wine consumers.

Surprisingly, millennial consumers of legal drinking age currently purchase very little wine online, even though they grew up with the Internet. The researchers discovered the main reasons were that millennials think shipping costs are too high and would prefer not to wait for a wine shipment. Also, they like to buy wine that they have an “experiential connection with," wrote the authors, a wine they've tasted in the past or one recommended by someone they know.

“Millennials enjoy the experience of physically choosing the wine and reading the labels in the retail outlet,” said Dr. Marianne McGarry Wolf, head of the Wine & Viticulture department at Cal Poly and a study author.

Though online wine sales currently constitute a small percentage of sales, most experts agree that the channel will continue to grow, especially with Amazon entering the arena in 2012 and large wine retailers such as Total Wine, BevMo, Vivino and Allvino expanding their web presence effectively.

 Cheers!

 The Wine Appassionata





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