“If you are a regular at any liquor shop in Mumbai and live nearby, the store delivers the order at your doorstep," she says.
That’s an informal delivery practice and has been around in the city for a while now— much before liquor delivery was made legal in the wake of the covid-19 pandemic in May 202
Mishra now lives in Delhi. And her alcohol buying experience hasn’t been quite the same. Outside of the posh neighbourhoods of south Delhi, a woman walking into a liquor store invites unwanted attention. And there is no home delivery. Not yet.
While defending a new excise policy in the state assembly in January this year, Manish Sisodia, the deputy chief minister of Delhi, admitted that not only does the skewed distribution of liquor shops cause inconvenience to consumers, the city also has fewer liquor shops per person compared to other cities. Delhi has roughly one shop per 29,000 people. In comparison, one outlet serves approximately 10,000 people in Bengaluru and Mumbai and 2,000 in Gurugram, Sisodia informed.
Delhi’s new liquor policy seeks to increase the state’s revenues and solve the distribution challenge. But home delivery is still out of bounds.
A well-framed liquor delivery policy could have been an answer to such an inefficient market, experts say. Perhaps, the government is skirting a potential political backlash—allegations of “ghar-ghar sharaab" (liquor at every door).
While alcohol politics plays out differently in different states, the pandemic offered every state a chance to bring themselves up to date with consumer preferences, particularly the upwardly mobile like Mishra. Only a handful of states—West Bengal, Maharashtra, Odisha, Jharkhand and Chhattisgarh—seized the opportunity and allowed alcohol delivery at home. These states invoked the National Disaster Management Act 2005, citing home delivery as a way to reduce crowding at liquor stores. The pandemic isn’t over yet and they have continued with the policy.
The excise commissioner of West Bengal as well as the principal secretary of Maharashtra’s excise department confirmed that the policy is still in place. However, a long-term decision is yet to be taken, they told Mint.
Swiggy has been delivering alcohol for about two years now in West Bengal and Odisha. Four new companies, including Dunzo, have been invited for empanelment, as per a 19 January notification of the West Bengal State Beverage Corporation Ltd. Maharashtra allows delivery only through registered liquor shops, not by a third party.
The numbers from these states are encouraging. Between 15 May 2020 and 31 March 2021, Maharashtra saw 60 lakh home deliveries; West Bengal recorded 1.91 lakh deliveries in the same period. Living Liquidz, a family-owned retail chain with 50 odd shops in Mumbai, has been generating 30% of its volume through home delivery for the last one year.
“We have always argued that alcohol delivery should become a part of regular lifestyle, beyond pandemic, and be included in the excise policy of states. However, the states that do not allow it are more concerned with the timing of the move, suitability of the political environment and extent of political backlash," said Nita Kapoor, CEO of International Spirits and Wines Association of India (ISWAI), an industry body.
The market, she added, is served by just about 80,000 licensed shops. Hence, lies a big opportunity for alcohol delivery services.
Meanwhile, home delivery would further feed the golden goose that is liquor tax. More people are likely to buy—perhaps more frequently—widening the market. A Mint analysis shows that major states collected more than ₹2 trillion under state excise in 2021-22. This was 31% higher than the mop-up during 2019-20, the pre-pandemic year.
High on desire
Let’s circle back to what consumers desire versus what politicians want.
A 36-year-old development professional from Delhi, who didn’t want to be identified, has experienced the convenience of home deliveries of alcohol. He uses Swiggy whenever he is in Kolkata, a city he often visits as his in-laws live there.
“Even though the liquor shop is near where I live, I would have preferred such a service in Delhi, too. We often end up having unannounced guests. And we do not have time to go to the shop at the last minute," he says. The neighbourhood liquor store, meanwhile, may not keep the brand of your choice, he adds.
Online deliveries also make alcohol purchase easier for consumers who do not necessarily drink themselves. “I’m an occasional drinker, but I use HipBar to order booze whenever my friends are around," says Debabrata Saha, a 28-year-old consultant based out of Kolkata. He has been drinking for the last two years but has never visited a liquor shop. HipBar is one of India’s oldest drinks app.
In May last year, ISAWI, in partnership with LocalCircles, a social media platform, conducted a survey on liquor deliveries covering 33,000 respondents across eight cities. The sample, nevertheless, was largely representative of the affluent section, the prime target group for delivery platforms.
About 81% consumers in Delhi, Chennai, Bengaluru and Hyderabad–cities that currently do not allow alcohol delivery–said that they would like to use home delivery services. The respondents cited convenience, brand availability and social distancing as the key reasons to justify their response.
The survey also found that 78% women were more likely to buy alcohol themselves if home deliveries were allowed. Mishra attests to this fact. Her frequency of alcohol purchase has slowed ever since she moved to Delhi. “While it’s not entirely due to the absence of delivery, it certainly has played a significant role," she says.
“Our analysis shows that women account for mere 5% of total footfalls in wine shops in the Mumbai area, whereas the proportion of women ordering through our online platform is 25-30%," says Nitesh Prakash, founder of WineWell, an online liquor store operating in Mumbai, Thane and Navi Mumbai. The company promises deliveries in under 90 minutes. It is an asset-lite company that interfaces between liquor retail shops and the consumer.
KYC for booze
The ISWAI-LocalCircles survey also underlines and explains why many politicians appear worried. Roughly 23% of the survey respondents were of the opinion that home delivery will promote underage drinking if there is no robust verification involved.
The alcohol industry, on the other hand, believes this is manageable. “There are sufficient technologies available to ensure that sale is made only to the people permitted to drink," says Vinod Giri, director general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), an industry body.
Swiggy, for instance, follows a one-time mandatory age verification process. Buyers have to upload a picture of their government ID, followed by a selfie. The verification process is automated through AI-based face recognition to ensure that the photo is authentic. Further, every order is verified by an OTP—this tries to ensure that an order cannot be placed and received without the consent of a registered user who is of legal age.
AB InBev, a brewing company that sells Budweiser and Stella Artois brands of beer, launched Beerbox in 2020, a tech platform that enables its listed outlets to deliver liquor within a three-four km radius—the beer maker partners with local store owners to open branded beer and wine stores in Maharashtra. Beerbox is active in Mumbai and Pune and follows an age verification process that is similar to Swiggy.
WineWell, meanwhile, follows a more manual verification process. “We have tried to replicate the offline mode of age verification for our online deliveries. Typically, a retailer asks for an ID only when he doubts a customer’s age. In our case, the delivery staff asks for the ID when the recipient appears to be younger," says Prakash. The legal drinking age is 25 in Maharashtra.
Online and OTP-enabled delivery may, in fact, be more effective than offline shopping in ensuring that the recipient does not order more than allowed by the state law. It can prevent overstocking.
Two models, old debates
As of now, the laggard states have two delivery models to think about: the direct retail-to-customer model of Maharashtra (only licensed retail shops and chains are allowed to deliver liquor) and the aggregator one that West Bengal, Odisha and Jharkhand have adopted. Here, e-commerce companies are allowed to execute deliveries in partnership with retail shops, similar to food delivery. In Kolkata, for instance, Swiggy and HipBar list the catalogue of various liquor stores—customers can choose the liquor of their choice and the shop they prefer.
Now, the crucial question: which model is better? The aggregator model definitely has its advantages.
The food and grocery aggregators have set the bar high with sub-15 and sub-10 minutes hyperlocal deliveries. Swiggy claims that its liquor orders are delivered in 30-35 minutes in Kolkata. In comparison, retail shops in Mumbai take between 60 and 90 minutes. At times, even two hours.
The aggregators have another advantage. The likes of Swiggy can allow a consumer to club their food and beverage orders. While the aggregators charge a delivery fee, buyers don’t seem to mind that. The ISWAI-LocalCircles survey found that consumers were willing to pay up to ₹100 as delivery charge.
Small and medium retailers, meanwhile, may see an incremental expansion in their revenues even as they forgo a commission the aggregators charge. This is not the case with the large and premium retailers who, at the moment, prefer executing the deliveries themselves. Some resist the idea of home delivery altogether for it provides a gateway to aggregators, who may eat into their margins and dilute their control over the supply chain.
“Once I hire a third party for delivery, they may start making direct contact with my customers and offer them a cheaper price for alcohol smuggled from Gurugram. The brand authenticity of Delhi will go away," says Varun Suri, who runs a wine and beer shop in south Delhi. “I have a database of 3,000-4,000 customers of my own. Which retailer will want his business to get out of hand?" he asks.
In the meantime, some retailers argue offline retail wouldn’t be dying anytime soon. There is a strong touch and feel factor to buying alcohol. Sounds familiar? This is an old argument all brick and mortar retailers of electronics and fashion forwarded before the Flipkarts and the Amazons chipped away at their marketshare.
Moksh Saini, the owner of Living Liquidz, the retail chain in Mumbai, has been around since 1977. He sees online home delivery service as inevitable given the rapidly changing consumer behaviour. He launched the company’s delivery app in June 2020, soon after Maharashtra legalised deliveries. Living Liquidz’s delivery service, he says, comes free of cost as of now.
“While a number of customers now prefer to order online for the ease with which the information is accessible on the app, most still want to visit the shops and explore their options. For them, it’s about the experience," Saini says.
“Our customers, whether online or offline, come to us for the trust and brand authenticity we have established over the years. This will never go out of fashion."
