With people spending an increasing amount of time in the confines of their home over the past year or so, wine businesses have been forced to look for new ways to reach their customers. With the growth of ecommerce, there is a massive potential to move away from the in-store pickup model and to sell wine online.
Whether due to a general malaise born out of reduced mobility during the pandemic or an unprecedented work-life imbalance, the fact is that the demand for liquors and wines has been going up. Indeed, India is one of the fastest-growing alcoholic beverage markets in the world, and this market is expected to grow at 6.8% annually until 2023. For existing wine retailers and those looking to enter this space, this represents an opportunity to harness the potential of smartphones and technology to meet this demand and take wine to the consumer’s doorstep.
1. Why sell wine online?
Traditionally, the alcohol industry has been known to be one of the most high-margin and profitable industries. Despite the sudden drop in alcohol sales over the course of multiple lockdowns, the alcohol industry was able to bounce back as soon as liquor stores reopened, with Indian consumers making their desire for alcohol evident.
It goes without saying that in a post-COVID world, the businesses that adopt an on-demand product delivery model will be the ones that will thrive in the market. The ability to tap the demand for wine using wine ecommerce is what will set players in the wine business apart.
Whether you own a vineyard or wine store, or are looking to establish a wine business, this is the right time to cash in on the huge potential of the wine market in India. According to certain reports, the wine market in India is expected to grow by USD 274 million (around INR 2,000 crore) over the next 5 years.
Having said this, establishing a wine business in India has always required jumping through complex legal and regulatory hoops. Even if you already have your own wine store, the delivery of alcohol is governed by a separate set of rules. Nevertheless, once you’ve complied with the various rules and regulations, establishing your own online wine store gets easier.
2. Where can you sell wine online legally in India?
Selling wine online is very different from selling groceries or fashion products online. Wine store owners have to navigate their way through a maze of regulations to set up a successful online wine business. To begin with, alcohol laws and taxes differ from place to place.
In some states, wine businesses can deliver directly to consumers (DTC), while in others, consumers have to settle for over-the-counter purchases. For example, Karnataka, Orissa, and Punjab allow the online sale and delivery of alcohol. In Delhi, in particular, the excise rules have been amended to accommodate the online sale of wine.
As of June 2021, the following cities/states allow the online sale of alcohol:
- Pune (Maharashtra)
- Kolkata (West Bengal)
3. How to get a licence to sell wine online?
Although every state in India has its own set of requirements, here is a quick summary of the general steps you need to take to get a wine shop licence.
- Log on to the State Excise Department’s official website.
- Download a Wine Shop Licence application form.
- Duly fill the form with the required details, such as the type of liquor, premises for business, type of licence, and background details.
- Submit the form along with the necessary supporting documents to the relevant authority.
- Pay the required application fee at the time of submission.
- The state authority will verify all the details submitted, and might request you provide additional information if needed.
- After verification, you will receive a notice at your address with the details of your licence.
A wine shop licence is issued for one year, after which it must be renewed via a renewal application. Also, it should be noted that the steps mentioned above apply regardless of whether you wish to sell wine online or offline.
4. Business models to sell wine online
In order to start your online wine-selling business, you need to decide what sort of business model you want to adopt. When you’re in the business of selling a product, how you source your product is just as important as how you intend to sell it. For selling wine online using an app or a website, there are three main business models.
- Selling your own wine
- Sourcing your wine from third parties
- Becoming a wine aggregator
Let’s take a look at each of these in some detail.
If you already own a winery, make wine yourself, or own a wine store, this business model will work best for you. Since sourcing the wine is not a problem in this model, your primary task will be to set up an online portal where consumers can buy your wine. The biggest benefit of this business model is that you won’t be sharing your profits with anyone else.
In this model, your primary source of revenue will be the sale of your wine itself. You can also charge a nominal delivery fee for home delivery services.
You could hire a website developer to create an online store for you, or you could build your own online store using a platform like Shopify. The objective is to allow consumers – who would otherwise have had to visit your winery or store in person – to order their favourite wines online and have them shipped to them directly.
You can also augment your store’s functionalities using various apps. For instance, you can set up a dedicated chatbot in your store, such as Tidio, to help your consumers find exactly what they are looking for. Or you could allow your customers to chat with you over WhatsApp, or share a link to your store on WhatsApp, with apps like SuperLemon.
- Sourcing your wine from third parties
If you don’t produce any wine yourself, you’ll have to source it from a supplier. You can build your own inventory of high-end and standard wines based on market trends in order to sell them online.
Since this model effectively makes you an online wine retailer, you can source your wine from wholesalers. You’ll need to get in touch with wine traders for the best deals, or directly source the wine from established wineries. In both cases, you will need to establish a robust procurement network that will ensure a continuous supply of wines, which in turn will allow you to establish yourself as a reliable online wine retailer.
With this model, your primary source of profit will be the margin you set on top of the wholesaler’s rate. You should note that in some states, the maximum retail price of a liquor brand may be capped by the excise department, which will automatically cap your margins as well.
- Becoming a wine aggregator
If you are not interested in producing your own wine or having your own inventory of wines, this model is for you. In this model, your main product will be a wine aggregation platform, rather than wine itself. In other words, you’ll operate a platform that will serve as an intermediary between wine consumers and companies that actually make or resell wine. Most of your revenue in such a scenario will typically come from the commission that you’ll charge on every sale.
The process of developing such a business will entail developing your own website and app. You can then offer merchant accounts to wine sellers and list out their products, images, descriptions, and prices.
Creating a state-of-the-art online store will allow you to build a positive brand image as an online wine platform. Moreover, you can also make money by selling advertisement space on your website to potential wine sellers.
Do keep in mind that regardless of which of these three models you decide to go with, you can also augment your per-order margin with premium memberships and deals that you can sell for a fixed annual or monthly fee.
Lastly, a standard marketing strategy you can use to boost sales regardless of your model is to offer free delivery for purchases above a certain limit. This will encourage customers to rack up order totals higher than that limit, as it will save them the effort of visiting your store in person.
5. How to sell wine online on your own ecommerce store?
Ecommerce is an avenue with exponential growth potential, given the facility it creates for both business as well as consumers. The online wine market also has massive potential, given that it’s a huge market that’s still relatively untapped. The objective of this market is to enable wine sellers – whether or not they already have a physical wine store – to interact with buyers who wish to purchase wine, and also to enable fine and rare wines to be traded and sold.
There are plenty of steps that go into creating a successful wine ecommerce business. For better comprehension, this seemingly daunting task has been broken down into three parts:
- Research and preparation
- Setting up your own online wine store
- Marketing your online wine store
Let’s explore each in greater detail.
1. Research and preparation
Before you go ahead and start putting your online store together, here’s a checklist of some of the steps you should take.
- Conduct detailed market research
If you are a wine enthusiast who’s just entering this business, you need to carry out thorough market research and draw up a list of popular wines in the market. This will involve studying the big and small market players for a better understanding of the wine market. Conduct a thorough competitor analysis of existing online platforms to get an idea of the processes followed by them and to zero in on elements that will help you differentiate your online wine store.
- Choose the wines you want to sell
Your next step will be to select the wines that you wish to source, stock, and sell. You can stock wines by leading brands in the market, or even tap into lesser-known artisanal wine creations and offer them in your store.
Given that consumers are likely to opt for branded wines, stocking well-regarded brands will contribute directly to higher sales and margins. But it can also make sense to offer rare, hard-to-find wines, as they can attract more opinionated aficionados. Although selecting the wines to sell based on existing market trends is a good place to start, it is also a good idea to choose a niche to target a specific kind of consumer base and then expand from there. For example, you can offer wines that target a specific price point, or promote wines made from fruits other than grapes.
Before you place your wine offerings online, it is essential to establish a reliable source for your inventory. You can either choose a wholesaler or become a dropshipper by opting for a supplier that delivers your products to customers directly.
If you decide to go the wholesaler route, make sure you have tie-ups with multiple wholesalers, and build healthy relationships with them. Close and lasting partnerships with wholesalers are a great way to ensure that you can always purchase wine in bulk at reasonable prices.
As discussed above, you can also open up your ecommerce website to wine brands and have them register on your platform as sellers. This business model entails attracting wine sellers in much the same way as consumers. You can also partner up with top wine brands by showcasing the scope of online wine sales and the potential for additional revenue for big players.
Whether you are producing and selling your own wine, sourcing wine from third-party suppliers, dropshipping or aggregating wines, your choice of the business model will factor heavily into drafting your business plan. Once you’ve figured out your business model, studied the market and selected your suppliers, you should have most of the information at hand to create a comprehensive business plan with the help of the resources listed below.
2. Setting up your own online wine store
As with any ecommerce business, the steps to set up your own store is no different for selling wine online. Below is a checklist of steps and a list of resources to guide you through the process.
- Develop a distinctive brand
In a competitive market such as the wine business, developing a brand that stands out from the rest is critical to your success. Especially so if you are a wine maker or a private–label product, because wine is a subjective experience and how your brand is perceived will influence that subjectivity.
If your business model is a different one, be cognizant of the value you provide to your customers and work that into the development of your brand. If you are a platform aggregating select wines, curation may be the value you provide. If you are a wine delivery application, convenience is the value you provide.
Your website is your online storefront. And the effect it has on your wine business may be intangible, but significant. Understanding your customer persona will help you zero in on the design sensibilities that are most likely to appeal to your target audience. There are a number of ecommerce website builders to choose from and Shopify has an extensive library of ready-to-use themes and templates you can customise and apply to your store. Alternatively, get in touch with Shopify Experts to help you get your storefront just right.
Closer to the business end of selling wine online, how you categorise and display the wines in your store will have an outsized effect on your conversions. No wonder that ecommerce product pages take the lion's share of the attention given to analytics, testing and optimisation. Further, for something as abstract and ephemeral as taste and smell, your product descriptions will be key in leading your store visitors to the wine they desire.
- Set up payments and logistics
These are a few necessary steps to make your store ecommerce-ready. All the hard work done to entice your customer to make a purchase finally bears fruit with a glitch-free online payment gateway, and reliable shipping and fulfilment. Once the journey is completed to the customer’s delight, they will be more than likely to return to your wine store again and again.
With your online wine store up and running, the only thing left to do is to draw your customers to it. Well, it’s not as simple as it sounds. But the next section should help you break it down into actionable steps to market your store.
3. Marketing your online wine store
The wine business is a crowded marketplace that comprises small local wine shops, large retail stores, and online wine stores and wine-delivery apps. As is the case with any business, to stand a fighting chance, your wine business needs to grab attention and stand out. This is true not just for gaining new customers, but also for retaining old ones and keeping them returning to your store. Here are a few helpful strategies to maximise your chances of success:
- Apply SEO (Search Engine Optimisation) techniques to your store
Once you’ve created your online store, it's necessary to make it easily discoverable. When a potential consumer googles ‘wine delivery near me’, they have a clear intention of making a purchase. Improving the SEO of the content on your website will increase the chances of you ranking high in your potential consumer’s search results.
Creating additional content, like blogs and guides on your website, will only help improve your search rankings, leading to greater traffic on your online store and improved discoverability.
Here is a beginner’s guide to ecommerce SEO to get you started.
- Refine your online marketing
Your market research should help you identify where your customers are likely to be concentrated, what their demographic profiles are, what their spending patterns are like, and much more. Use such information to target your online marketing efforts.
Be it marketing with Google Adwords, or social media marketing on Facebook, Instagram, and Twitter, all paid online marketing avenues give you a diverse set of target criteria that you can use to your advantage. Tailor your online marketing to target for customer profile factors, seasonal factors, as well as geographical factors.
You can increase your online marketing budgets and offer discounts during times when purchases of wine are more likely, such as when festivals or special events are around the corner. You can also localise your online marketing efforts to areas where your potential customers’ density is high, in order to compete with brick-and-mortar wine stores.
- Create offline engagements
Even though your ultimate objective is to sell wine online, there are tremendous advantages to building an offline presence as well. This does not, however, mean that you need to maintain an offline brick-and-mortar store.
You could set up pop-up shops for your wine brand in a locality where many of your potential customers are likely to be. This could be for a few days, or even over a weekend if a festival is going on. You could create wine-tasting events for your brand, or even partner with existing events like music festivals or stand-up comedy shows. In addition to these, you could market and sell vineyard tours and related experiences.
Offline engagements not only enhance your word-of-mouth publicity, but could get you some local press coverage too. All of which would go a long way towards boosting your brand recall and driving your online sales.
Having a social media presence is effectively an essential requirement for most brands that sell online. Social media platforms are where your prospective and existing customers get to engage with your brand.
Maintaining social media profiles or pages for your brand requires you to post frequently to stay at the top of your customers’ minds. Look upon this as an opportunity to inform your followers about updates, offers, and discounts, and to drive traffic to your online store.
However, it is important to make sure that you don’t come off as too sales-y. The best brands on social media post content that’s informative, useful, entertaining, and relevant. Another thing to note is to always stay true to your brand personality in these interactions.
In addition, given the legal labyrinth that wine sellers have to navigate anyway, it might be a good idea to go the extra mile and include disclaimers or advisories urging legal compliance on your store and social media pages. For instance, you could have all visitors to your store be greeted by a pop-up that asks them to confirm that they’re older than the legal drinking age for their state. Additionally, the bio on your socials could mention that one must be of legal drinking age to follow.
If you have a Shopify store, you can integrate it with your social media pages, enabling you to sell directly on those platforms. For instance, the Facebook Channel app on Shopify sets you up to sell directly on Facebook and Instagram. In fact, even content creation and marketing for social media can be managed easily using some of the nifty social media apps that can be integrated into your Shopify store.
- Personalise the customer experience and reward loyalty
Ecommerce brands routinely incentivise new customers with strategies like discount coupons and offers on making the first purchase. Once a customer signs in on your online store, you can then personalise their online store experience by location, by recommendations based on their purchase history etc.
Personalisation has hidden potential as a key driver of sales in ecommerce marketing. It makes your advertising effort more relevant and effective, and increases the likelihood of conversions. In addition, you could reach out to customers on their birthdays, anniversaries, and similar occasions, when they are most likely to buy wine from your store.
You could also enhance customer retention with privileged memberships that give customers special offers, free delivery, priority for trying out new wines, etc. for a small fee. It also makes it easier to reward repeated purchases with discounts and goodies.
- Incentivise reviews and referrals
One of the oldest marketing methods is word of mouth, i.e. getting your customers to talk about your product with people in their network and drive awareness. For any consumer, a recommendation from a friend is likely to be more trustworthy than a direct advertisement from the brand.
According to the Global Trust in Advertising Survey 2021 by Nielsen, 88% of global respondents trust recommendations from people they know more than any other channel. Herein lies a great opportunity to leverage the social interactions inherent to the culture of consuming wine. When it comes to ecommerce and online marketing, there are ways to catalyse this process to your benefit.
If your customer can earn points on your online store for publishing a review of any of your wines, they will be more likely to do so. Customers can also be incentivised to share their experience on their social media channels with a catchy hashtag.
Similarly, an existing customer can be given a discount for every new customer they bring to you, in the form of a referral coupon. This works best when the new customer also gets a discount coupon upon signing up.
- Use other ecommerce marketing strategies
The list of marketing strategies mentioned above is by no means exhaustive. Most marketing methods used to sell products on ecommerce websites, can easily be applied to selling wine online. To learn more, you must delve deeper into the subject of ecommerce marketing. However, a few commonly used strategies are listed below.
To market your online wine business you should include a mix of many of the approaches listed above. Your budget will undoubtedly be an important consideration. If you’re using Shopify, there are a number of marketing apps you can integrate with your store to help you with many of these marketing strategies.
6. Examples of online wine businesses in the Indian market
Source: WineWell – a Shopify store
In July 2020, WineWell launched an online alcohol store in response to the first lockdown with Shopify. It has a wide range of wines that are suitable not just for last-minute BYOB parties but also for gifting purposes. To make last-mile deliveries as efficient as possible, they leverage their Shopify online store to partner with several local retailers and delivery companies. They are primarily operational in Mumbai and trying to make a network in other cities as well.
Source: Fratelli Wines – a Shopify store.
Fratelli Wines is a vineyard and winery, selling its own distinct brand of wines since 2007. With an attractive online store powered by Shopify, the brand now sells directly to its customers pan India, managing its own shipping and fulfilment to augment its sales from distribution across retail stores.
Source: Wine Park
Wine Park has an inventory of over 200 local and imported wines with a wide price range. The selection of wines is also given wine tasting notes and critics’ ratings to help you make a more informed choice. They make deliveries across Mumbai, with free shipping on orders of above Rs 3,000.
Source: Living Liquidz
With its inventory of over 1,500 brands from India and across the world, Living Liquidz has one of the largest selections of wine online, catering to a wide range of tastes and preferences. What began as a number of brick and mortar retail stores, they now take orders online through their own app, for deliveries in Mumbai, Navi Mumbai, Thane, and Palghar. They also have a selection of home bar accessories and wine glasses to choose from.
Selling wine online: in the spirit of keeping up with the times
Alcohol is often characterised by the inelasticity of its demand vis-à-vis its price. In other words, unlike the case for other goods, the price of alcohol plays a less important role in determining the demand for it. To add to this, an increasing number of consumers are using ecommerce to buy products, including wine – an unexpected silver lining to the disruption caused by the many lockdowns.
In this scenario, wine businesses have been presented with an unprecedented opportunity to take their relationship with their consumers to the next level through ecommerce. Would-be new players can also tap into this opportunity, so if you’re looking to enter this market, this certainly looks like a great time to get started.
1. What is the cost of creating a wine delivery app?
The cost of developing a wine delivery app depends on multiple factors like the platform, design, features, and required maintenance, among other factors. According to this breakdown of what it can cost to develop an app, you will probably have to pay upwards of Rs 7.5 lakh for a professional-quality app.
2. Is it illegal to sell wine online in India?
No, it is not illegal to sell wine online in India. However, every state has its own regulations and policies regarding the sale and delivery of wines. Depending on the state you are in and as long as you have obtained all the necessary permits and licences, you will be able to sell wine online.
As of June 2021, the following cities/states allow the online sale of alcohol:
- Pune (Maharashtra)
- Kolkata (West Bengal)
3. Can I sell wine online in India if I don’t own a winery?
You can sell wine online in India even if you don’t own a winery. You can start your online wine business by sourcing your wine from retailers, wholesale distributors, or even dropshipping directly from vineyards and wine-makers.