BUT ON­LINE IS Dis­rup­tive & Grow­ing

Perfect Sourcing - - Cover Story -

In 2000, Kmart was the third­largest US re­tailer, with $36 bil­lion in sales; by 2014, its an­nual rev­enues had de­clined by two-thirds. Over the same pe­riod, Ama­zon’s an­nual sales grew to $89 bil­lion from about $2.8 bil­lion. Alibaba, the mar­ket leader in China’s boom­ing e-com­merce busi­ness, was only a 15-year-old com­pany when in 2014 it filed the largest IPO ever, val­ued at $25 bil­lion.

Ac­cord­ing to Cowen an­a­lysts, Ama­zon is ex­pected to sur­pass Macy’s to be­come the big­gest ap­parel seller in the US this year. The com­pany’s cloth­ing and ac­ces­sory sales are ex­pected to grow nearly 30 per cent next year, to $28 bil­lion, Macy’s ap­parel sales, by com­par­i­son, are ex­pected to drop 4 per cent to $22 bil­lion in the pe­riod.

Ama­zon cur­rently claims about 6.6 per cent of the mar­ket. That share is ex­pected to in­crease to 8.2 per cent by next year and fur­ther ex­pand to 16.2 per cent within five years, ac­cord­ing to Cowen an­a­lysts.

By 2021, Cowen ex­pects Ama­zon to gen­er­ate $62 bil­lion in an­nual ap­parel sales. TJ Maxx is ex­pected to be the No. 2 cloth­ing seller, with $26 bil­lion in sales, and Macy’s is ex­pected to claim the No. 3 spot, with $23 bil­lion in sales.

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