According to a recent report from JP Morgan they are predicting that Amazon could become the largest US retailer by 2022 and overtake Walmart. Whilst they are the largest eCommerce seller in the US, when it comes to retail, Walmarts physical presence gives them the edge. However maybe not for much longer.
According to JP Morgan, Amazon’s retail business is the fastest growing at scale, and their GMV (Gross Merchandise Volume) has grown much faster than both the US adjusted retail sales and US eCommerce metrics.
Coming to this conclusion is not easy as neither Amazon or Walmart release their GMV in their quarterly earnings calls. So analysts from JP Morgan can only go off the most recent data from 2020 in which Amazon’s GMV climbed 41% year on year to $316 Billion. Whereas Walmarts grew 10% year on year to a total of $439 Billion.
“Based on current estimates, we believe Amazon could surpass Walmart to become the largest U.S. retailer in 2022,”Christopher Horvers and Doug Anmuth, Analysts, J.P. Morgan.
There are a number of reasons why this has happened, a large part will surely have been played by Covid-19 forcing more shoppers online to the eCommerce giant. People forced away from the plagued physical stores of Walmart due to lockdown. Mix this with Amazon’s continued expansion into the grocery and apparel markets and of course the growing Prime audience and the growth of Amazon is not surprising.
Due to this JP Morgan now estimates that Amazon has now extended its eCommerce marketshare to 39%, up from 24% in 2014.
Amazon’s Delivery Dominance
On top of all this Amazon is also estimated to deliver 7 Billion packages in 2021, for context UPS is estimated to deliver approximately 6 Billion according to this report found by the analysts.
In such a short period of time Amazon has built a delivery network to rival the likes of FedEx, UPS and the USPS. With an incredible warehouse network and last mile delivery platform it is an infrastructure that no other retailer can compete with.
Whether Amazon takes over from Walmart in 2021 or not, it feels like it is a matter of when, not if.
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