Amazon is on way to overtake Walmart as the largest US retailer in 2022, according to research by JPMorgan released recently. The company’s analysts said Amazon's US retail business is the ‘fastest growing at scale’. Between 2014 and 2020, Amazon's US gross merchandise volume (GMV) has grown ‘significantly faster’ than both US adjusted retail sales and US e-commerce, they said.
"Based on current estimates, we believe Amazon could surpass Walmart to become the largest US retailer in 2022," analysts Christopher Horvers and Doug Anmuth wrote.Amazon is on way to overtake Walmart as the largest US retailer in 2022, according to JPMorgan research. The company's analysts said Amazon's US retail business is the 'fastest growing at scale'. Between 2014 and 2020, Amazon's US gross merchandise volume (GMV) has grown 'significantly faster' than both US adjusted retail sales and US e-commerce, they said.#
GMV is a metric used to determine the total value of goods sold over a certain duration.
Amazon's GMV in 2020 went up by 41 per cent year over year (YoY) to $316 billion, while Walmart's GMV is estimated to have grown by 10 per cent YoY to $439 billion last year, they were quoted as saying by US media reports.
Horvers and Anmuth highlighted a few factors they believe are driving Amazon's top-line growth, including an expansion into ‘large and under-penetrated categories’ like grocery and apparel, strong growth of third-party seller sales and the ‘Prime flywheel’.
Amazon now has more than 200 million Prime subscribers, up from 150 million at the beginning of 2020, chief executive officer Jeff Bezos said in April.
Amazon's pandemic-fueled sales surge has helped it grow its slice of the e-commerce market. JPMorgan estimates Amazon expanded its share of the US e-commerce market to 39 per cent in 2020, up from 24 per cent in 2014.
The accelerated adoption of e-commerce has also provided a lift to other areas of Amazon's business.
Amazon is on track to ‘become one of the largest delivery companies’ in the United States, analysts at Bank of America wrote in research published recently. Amazon is estimated to deliver 7 billion packages in 2021, surpassing the roughly 6 billion packages UPS is expected to deliver in the United States this year, the analysts wrote, citing figures from MWPVL International, a supply chain and logistics consulting firm.
MWPVL estimates Amazon handled about 5 billion of the 7.35 billion packages it shipped in 2020. UPS and the US Postal Service handled the other 1.25 billion and 1.1 billion, respectively, according to Bank of America analysts.
A report released in April this year from Edge by Ascential’s market research arm Retail Insight said Amazon is set to overtake Walmart as the largest retailer in the United States within the next four years. Amazon’s GMV sales will reach $631.6 billion by 2025, representing a compound annual growth rate (CAGR) of 14 per cent between 2020 and 2025, it said. Walmart total sales will grow at 3.9 per cent CAGR, reaching $523.3 billion by 2025.
Fibre2Fashion News Desk (DS)
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