Neither is Amazon in e-commerce, they hold ~39% of the US market and their eCommerce growth lags behind total eCommerce with 9% and 10% respectively. Wal-Mart is at about 6.5% but had nearly 25% growth this year while capturing 36% of all eGrocery sales in the US.
The only place where Amazon is even near 50% is in consumer electronics and office supplies.
The eCommerce market as such has a very long tail and a lot of competitive players just behind Wal-Mart.
Your post is inaccurate. WalMart still beats Amazon handsomely in terms of revenue, not to mention, Amazon only recently shifted to profitability, and now their growth is declining.
This notion that Amazon has retail market capture or is close to market capture is completely inaccurate.
My question, though, is whether Jet is "losing money on every sale but making it up in volume." That is, your articles mention how jet aims to be about 5% cheaper than Amazon, but they say nothing about the long term cost structure that would let them sell at these cheaper prices and still be profitable.
That's a crazy pair of facts. Interesting to compare Walmart on this front - its revenue is $500B with growth at 2%, whereas Amazon has sales on the same order of magnitude but growth an order of magnitude higher. I wonder how long this rate of growth is sustainable, both for Amazon and the rest of FAANG. Have there ever been companies this big growing this fast?
Revenue of a general purpose retailer/ecommerce is not comparable to revenues of other types of companies. The margins on that revenue is always going to be miniscule
We don't need to be anecdotal about it, we have data.
2015 sales: $15.389 billion
2016 sales: $15.724 billion
Their business growth has stopped. In fact, it's that negative turn (in regards to the perception of WFM as a growth machine) that halved their stock, which led to Amazon acquiring them.
To make matters worse for the company, their net income had been contracting for years.
2014: $579m net income
2015: $536m net income
2016: $507m net income
Amazon will hack that down further, basically taking WFM where it was already going as their margins were eroding for years.
>2017 to 2018 Amazon grew from $103 to $121B revenues or by $18B, while Walmart grew from $375 to $388B or by $13B. However, Amazon's revenues include some fast growing areas such as AWS, so the revenues they are taking away from other retailers are probably about the same.
Momentum is more about relative growth than absolute numbers (13 vs 18). And longer term than just 2017-2018.
Direct revenue comparison between Wal-mart and Amazon makes no sense. Amazon revenues are a lot more diversified than Walmart.
Portions like AWS, Digital and 3P/FBA service revenues will have much higher margins than first party retail revenues (which is the most like Wal-mart revenues, except the margins are completely different due to no having brick-and-mortar stores.). Additionally, Amazon is a lot more international than Wal-mart so comparison is even harder.
All of this completely ignore the growth rates of these two companies.
If this was the only thing that mattered for businesses, we wouldn't have Amazon as Walmart has consistently produced more net profit over Amazon since the last 22 years. 1
I think you've overlooked this bit of the article:
> (Amazon's) roughly $180 billion in annual sales remains dwarfed by Walmart’s $500 billion, but sales at the big-box retailer inched up 3 percent in the year ended on Jan. 31. Amazon’s revenue rose at least 25 percent in 2017, excluding sales from Whole Foods. That also means Amazon is growing faster than it did three years ago, when it was half its present size.
So to sum up: (1) Amazon doubled it's revenue in 3 years (2) It's growing faster now than it was 3 years ago (3) None of that even includes Whole Foods; and (4) Walmart's revenue grew only 3 percent.
So if it continues on it's current path it seems that Amazon could pass Walmart within 5 years. I'm not saying this will surely happen but I wouldn't at all be surprised if it does.
As an aside it's also worth noting that Amazon has a significant non-USA presence, AFAICT Walmart has none.
2017 to 2018 Amazon grew from $103 to $121B revenues or by $18B, while Walmart grew from $375 to $388B or by $13B. However, Amazon's revenues include some fast growing areas such as AWS, so the revenues they are taking away from other retailers are probably about the same.
Amazon's impact on retail may be felt more because it sells a vast variety of products, which makes a lot of the small boutique stores in malls no longer viable. That space has to be converted to services or close.
I'm confused why you would tie Amazon's future, an eCommerce company who also has a strong cloud (AWS) and digital media division and a growing hardware division (Kindle, Fire) to a brick and mortar retailer such as WalMart.
Even discarding all other revenue streams, you want to compare the company to a retailer growing sales at 1% y/y (WalMart), while they grow sales at 22%? All this while only being in 12 international markets and citing a lack of non-English content as holding them back in the high margin area of digital content.
Your evaluation seems entirely misguided and ham-handed to be honest.
On the other hand, Walmart is certainly feeling the pressure from Amazon and improving customer interaction is likely high on their strategic radar. To wit: AMZN revenue +33% to a $170 Billion run rate, vs. WMT revenue virtually unchanged over the last 4 years at $485 Billion. Walmart recently introduced their own version of Prime, and AMZN is now in the grocery business, two more differentiators that have been closed off between the two.
It doesn't take too many 30% years to go from $170 to $485 Billion (not that they'll continue at that pace, but shit, this is year 23 for AMZN, and their growth is still incredible, [AWS, AWS, AWS]).
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Amazon minus WF is still growing at 29%... WF minus Jet and other acquisitions was growing ecommerce at less than 20% from a much smaller base.
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