By Olivia Widen
Since the COVID-19 pandemic started, almost every industry has seen exponential growth in e-commerce, and the liquor market is no exception. Despite the overall return of consumption patterns to pre-pandemic levels, online sales of alcohol are forecast to show steady growth.
In its 2022 Global E-commerce Strategic Study, the International Wine & Spirit Research (IWSR) predicted that online alcohol sales in 16 key global markets would reach nearly $40 billion by 2026. Markets in the Asia-Pacific region such as Australia, China, and Japan have shown especially high e-commerce penetration. In contrast, regulations in South Korea mean this nation has a long way to go to invigorate its liquor market.
Korean alcohol consumers face difficulty leveraging the benefits of e-commerce because liquor laws severely restrict online alcohol sales. Those restrictions exist mainly to prevent minors from gaining access to alcohol. But when market researchers from Embrain surveyed 1,000 alcohol consumers in Korea in September, 51 percent agreed that restrictions on online liquor sales should be relaxed. Even more respondents, 68 percent, agreed that concerns about underage drinking could be alleviated.
E-commerce in alcohol is legal in most Asia-Pacific markets, and it has shown rapid growth against a backdrop of responsible consumer behavior and voluntary self-regulation on the part of the industry. Many cases worldwide demonstrate that e-commerce in alcohol can be undertaken safely and responsibly and that it can coexist with measures to protect underage or at-risk consumers.
A representative case is that of Australia, the first country in which the industry led the development of a code of conduct to prevent minors from accessing alcohol online. The Online Alcohol Sale & Delivery Code of Conduct was launched in 2019, and its signatories accounted for more than 80 percent of the alcohol sold online in Australia. Four years after its introduction, a study by Retail Drinks Australia revealed that online purchasers of alcohol were generally from older demographics, ages 36-55, and the liberalization of e-commerce had done nothing to encourage underage drinking.
Voluntary self-regulation involves training and awareness-raising activities designed for various targets, from e-retailers to delivery companies. In most countries where e-commerce in alcohol is entrenched, it is common for alcohol producers to take the lead in activating training systems to increase awareness of the legal obligation to protect minors.
For instance, earlier this year the Hong Kong Forum for Responsible Drinking launched the ID 18 Responsible Retailing Training Course in partnership with major retailers in Hong Kong such as Watson’s Wine. Frontline staff, such as retail employees and delivery drivers, learned about their legal duty to verify their customers’ ages. In Vietnam, an online training program in legal compliance for e-commerce vendors of alcohol was launched in 2022. This course was easily accessible to anyone involved in selling alcohol via e-commerce.
Reflecting on these cases, Korea would do well to initiate regulatory changes and embrace online liquor sales. A near-total ban only fosters an illicit trade, creating even more unregulated spaces for consumers who should not have access to alcohol. Concerns about underage and irresponsible drinking should be resolved through voluntary self-regulation under an adapted framework that suits Korea’s national, cultural, and economic context. There is no one-size-fits-all approach when it comes to regulating online liquor sales, but there is little doubt that voluntary self-regulation by Korea’s liquor industry, or co-regulation in which it works hand in hand with government agencies, is imperative to the establishment of a safe, responsible e-commerce environment for alcohol.
Olivia Widen is the director of Asia Pacific International Spirits and Wines Alliance. Views in this column are her own. -- Ed.
