Amazon’s Big Lead Growing Even More
By the end of the year, Amazon will account for almost half of all U.S. e- commerce sales, according to new research from eMarketer.
By every metric that counts, the Jeff Bezos-led Amazon is the giant of online retail. That’s no secret, but even breathless retail experts might be stunned by the marketplace’s gonzo numbers: After drilling into the marketplace’s various product categories, eMarketer projected that Amazon will generate $258.2 billion of U.S. e- commerce sales this year, amounting to growth of almost 30 percent over 2017. The company closed out last year with roughly 44 percent of the market.
The numbers paint a sobering picture for the retail industry. If the projections hold true, the company is racing toward a threshold with mounting sales that beat all of its competitors combined.
Overall, there’s a significant gap between Amazon and the number-two retailer — eBay — on the report’s “Top U.S. Companies, Ranked by Retail E-commerce Sales Share, 2018.” Amazon’s projected 49.1 percent share dwarfs eBay’s
6.6 percent piece of the pie. Further down the list, the fourth-ranked merchant, Walmart, and the eighth-ranked player, Macy’s Inc., clock in with 3.7 and 1.2 percent, respectively.
As for the performance of Amazon’s third-party marketplace versus sales of its house brands, there’s no comparison. Outside merchants on the platform are expected to pull in more than double the sales of Amazon’s own labels by year’s end, at 68 percent versus 32 percent.
Next year, the marketplace will even tick upward slightly, accounting for 70.7 percent of the company’s online sales.
The projections emerge just as the e-commerce giant prepares for Prime
Day, which starts Monday and extends into Tuesday. The company concocted the summertime sales holiday in 2015 and it’s been a booster ever since. In 2016, Amazon’s sales shot up more than 60 percent over the previous Prime Day, then jumped another 60 percent last year, padding the company’s bottom line with $2.41 billion in sales.
Such gains would be meaningful for any other retailer, but for Amazon’s business, that looks more like a pleasant uptick than a key growth driver.
This coming Monday gadgets are expected to be a top-selling area for Amazon, reflecting the platform’s strength in the category throughout the year. But eMarketer also singled out another rapidly expanding segment of the business: apparel and accessories. By the end of December, apparel and accessories are expected to have grown 38 percent over 2017 and account for more than 15 percent of the e-tailer’s overall 2018 sales.
The takeaway: Amazon’s pursuit of the fashion business is getting real. It may still have plenty of work to do to boost sales of its own labels. But with the outsized growth of its sprawling empire, it has even more runway than ever to figure it out.
The company’s massive business dwarfs the competition, according to a new report.