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According to a JPMorgan study released on Friday, Amazon is well on its way to overtaking Walmart as the largest U.S. retailer in 2022.
According to the company’s analysts, Amazon’s US retail business is “the fastest growing in scale”. Between 2014 and 2020, Amazon’s US Gross Goods Volume (GMV) – a closely watched industry metric used to measure the total value of goods sold over a period of time – grew “significantly faster” than both Adjusted US Retail Sales and US E-Commerce. Trade, said the analysts.
Neither Amazon nor Walmart highlight GMV in their quarterly results, but JPMorgan estimates that Amazon’s GMV is growing faster than its largest retail competitor. JPMorgan analysts said Amazon’s GMV rose 41% year-over-year to $ 316 billion in 2020, while Walmart’s GMV rose an estimated 10% to $ 439 billion in 2020.
“Based on current estimates, we believe that Amazon could overtake Walmart in 2022 to become the largest US retailer,” wrote JP Morgan analysts Christopher Horvers and Doug Anmuth on Friday.
Horvers and Anmuth highlighted a few factors that they believe will drive Amazon’s sales growth, including expansion into “large and under-penetrated categories” like groceries and apparel, strong growth in third-party sales, and the “Prime Flywheel.” “. Amazon CEO Jeff Bezos said in April the company now has more than 200 million Prime subscribers, up from 150 million in early 2020.
The coronavirus pandemic has rapidly accelerated the adoption of e-commerce and cemented Amazon’s dominance in the retail space. Stuck at home consumers turned to Amazon to shop for a variety of merchandise, ranging from toilet paper to exercise equipment. They also relied on Amazon for services they might not otherwise have considered, such as online grocery delivery.
The sales surge sparked by a pandemic has helped Amazon expand its share of the e-commerce market. JPMorgan estimates that Amazon expanded its share of the U.S. e-commerce market to 39% in 2020, up from 24% in 2014.
The accelerated adoption of e-commerce has also given other Amazon businesses a boost.
Amazon is well on the way to becoming “one of the largest delivery companies” in the US, analysts at Bank of America wrote in a study published on Tuesday.
It is estimated that Amazon will ship 7 billion packages in 2021, surpassing the roughly 6 billion packages UPS is expected to ship in the U.S. this year, the analysts wrote, citing figures from MWPVL International, a supply chain consultancy and logistics.
In recent years, Amazon has been quietly building a shipping operation that can compete with UPS, FedEx, and USPS. It maintains an ever-growing network of warehouses and last mile delivery stations, as well as an extensive logistics operation with planes, trucks and vans.
This enabled Amazon to ship most of its own orders. Amazon is currently shipping packages for other companies in the UK and could one day expand this service to the US
MWPVL estimates that Amazon processed about 5 billion of the 7.35 billion packages it sent in 2020. UPS and USPS processed the other 1.25 billion and 1.1 billion respectively, according to analysts at Bank of America.