The market of online drinks retailing has grown very strongly these last five years, increasing by 123% between 2005 and 2010. Quantitatively, the market was valued at £370 million in 2005 and more than £740 million in 2009. More importantly, a survey of Mintel assumes that the market will continue to grow in the next five years, though more slowly (59%). By the year of 2012, which is for our business the year of setting up, the market should go past the £1 billion mark. There is a high demand among the young consumers (18-24 years old), explained by the convenience of getting the products with online drinks shopping. This is a very interesting fact for our business, as our major customers are students from the university. The convenience of delivery is also fulfilling the needs of women and people of more than 45 years old, as they do not have to carry heavy bottles. We can assume that the very sceptical consumers, who are often senior people, can be convinced easily after the first try, if the transaction has been performed effectively. They often worry about the online payment, but this can be avoided with the payment when delivered that our business will implement.
E-business is adapted to the setting up of start-ups and small companies, like ours. Moreover, it provides a real opportunity for SME to compete with bigger companies, like Tesco. Online business can minimize company expenses as is can employ less staff; it also saves money as no prime location real estate is required. Modern technology is perfectly adapted to the e-commerce, and is also a great tool for informing consumers, especially with the vast wine market. There are many applications for iPhone nowadays, to explain for example which wine matches which meal, etc. Nowadays, the main tendency goes towards the protection of the environment. An online business means that less space and consequently less resource are necessary to hold the business properly. This can be a factor of choosing online shopping for today's good citizens.
We have to be vigilant about the possibility of abuse by underage drinkers. Indeed, a simple credit card will allow them to order alcohol. We have to strictly inform our delivers to ask for ID, proving that the actual buyer is legally old to purchase alcohol. It is true that some online drinks business require a minimum order to be profitable, like Majestic asking for at least six bottles of wine. Our business will not require a minimum order, as we intend to reach the profitability quite fast.
People becoming more aware of the dangers of alcohol, the overall consumption of alcohol is in decline. Moreover, the government is trying to regulate the alcohol industry, implementing legal measures, especially against binge drinking and underage drinking. There is also an economic factor, the government raising taxes on alcohol.
Macro environment analysis
Since many years, there has been a general concern about binge drinking leading to an antisocial behaviour, mostly among young people. To deal with this problem, the UK government implemented the National Alcohol Harm Reduction Strategy in March 2004. The strategy is composed by four main parts: Education and Communication of the dangers of the consumption of alcohol, Identification and Treatment of the hard drinkers, the third part is about Alcohol Related Crime and Disorder, as alcohol can lead to extreme violence, and the last part aims to make the Supply and the Industry aware of the responsibilities of their actions. However, this strategy has only a goal to inform of the dangers, it cannot take real actions to stop or to limit them. The government also launched the social responsibility scheme for alcohol retailers, which is a voluntary plan and gives advices such as how to better train employees so that they can ensure not to sell...
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