According to the recent figures from the London-based research group IWSR Drinks Market Analysis, India’s alcohol drinks market was worth almost $27.2 billion in 2018. Like most businesses, it was hit hard by the global pandemic and the subsequent lockdown. While a lot of restrictions were imposed by the government to ensure social distancing, a lot of small businesses shut down and shops closed, that didn’t mean the demand for booze went down.
When the lockdown was eased, hundreds of people started queuing up liquor stores in some cities, flouting social distancing guidelines, leading the police to resort to baton charges to disperse the huge crowds, and enforce social distancing protocols. So naturally, there came a growing wave of concern to allow liquor sales to go online for social distancing norms to run smoothly and safely. So, what is the situation of online liquor delivery in India now?
First, What Was the Situation Like in the Past?
In India, liquor is a state subject and its business is strictly regulated through Excise Departments in each state. So, for every state, the retailing rules, taxes, prices, and age limits are different. There was no legal provision for home deliveries of alcohol in India, something that the industry body International Spirits and Wines Association (ISWAI) is lobbying to change in association with online delivery companies such as Zomato, Swiggy, and others.
“The challenge is to ensure revenue from alcohol continues to be available”, ISWAI’s executive chairman Amrit Kiran Singh told Reuters. He said that states should allow alcohol deliveries to boost state revenues hit hard by the lockdown.
Alcohol stores were closed nationwide on March 25, complying with social distancing protocols. When the reopening in May caused people thronging outside stores in large numbers, the government had to quickly rethink. While the New Delhi authorities introduced a “Special Corona Fee” of 70% on top of retail liquor costs, Mumbai shut down its liquor stores all together within 2 days of reopening them.
So, the government resorted to online home delivery of alcohol. On May 8, the Supreme Court of India observed that the states should find out alternatives for the delivery of liquor. Here is where players like Zomato come into the picture.
The New Age Solution
Food delivery unicorns Zomato and Swiggy quickly took advantage of the situation by aiming to branch out their services into delivering alcohol as well. This move came in at a time when their businesses were already hit hard at the core due to COVID-19 lockdown. So, their attempt at diversifying was a smart business strategy, thanks to the huge demand for alcohol in India.
However, the delivery of liquor and liquor products is not as straightforward as the food delivery market. It is a highly regulated market. Different states have different legal ages of drinking. Moreover, the suppliers have to follow multiple restrictions and rules imposed by the government to stay within legal holds in terms of delivering liquor. For players like Swiggy and Zomato, these challenges have still been manageable.
To ensure the safe delivery of alcohol in compliance with laws, Swiggy introduced compulsory age verification and user authentication feature on their app. Customers have to verify their age by uploading a picture of a valid government ID. A selfie is then also required for authentication that is verified by the platform using an AI-powered system. All the orders carry a special OTP, which is required at the time of delivery and needs to be provided by the customer. There is also control over the quantity of liquor ordered.
“We have been working closely with local authorities to support them with initiatives like the expansion of grocery delivery and COVID-19 relief efforts. By enabling home delivery of alcohol safely and responsibly, we can generate additional business for retail outlets, while solving the problem of overcrowding, thereby promoting social distancing,” says Anuj Rathi, vice president, products, Swiggy.
Zomato as well has introduced consumption and identity verification protocols, several safety processes and checks, to ensure responsible and safe ordering and delivery of alcohol. There are age checks at the time of ordering as well as the delivery. Same as Swiggy, consumers need to upload valid ID proof to show they are eligible for orders, which is later verified by the delivery personnel at the time of the handing of the product. There are product category limits as well to promote responsible consumption. The app only has licensed alcohol retailers who have opted for the service. Now, several states have allowed home delivery of liquor. Zomato and Swiggy services are available in states like Jharkhand, Odisha, and West Bengal.
This move by the delivery companies like Zomato and Swiggy has opened a new window for alcohol orders through smartphones, which in turn promotes social distancing and customer safety. Industry insiders also predict that this will open a whole new dimension in the delivery space and can be a massive revenue generator. On the other hand, these companies will be wishing the idea does not prove to be a stillborn, as and when the restrictions due to COVID-19 ease.
Written By - Radhika Rathi
Edited By - Vaibhav Sharma
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