Amazon to overtake Walmart as largest U.S. retailer in 2022 – JPMorgan

Amazon is on track to overtake Walmart as the largest US retailer by 2022, according to research by JPMorgan released Friday.

Amazon’s US retail business is “the fastest growing at scale,” according to company analysts. Between 2014 and 2020, Amazon’s U.S. Gross Merchandise Volume, or GMV, a closely-tracked industry metric used to measure the total value of goods sold over a given period of time , has grown “significantly faster” than adjusted US retail sales and US e-commerce sales, analysts said.

Neither Amazon nor Walmart outperform GMV in their quarterly earnings results, but JPMorgan estimates that Amazon’s GMV is growing faster than its largest retail competitor. JPMorgan analysts said Amazon’s GMV in 2020 rose 41% year-over-year to $ 316 billion, while Walmart’s GMV is estimated to grow 10% year-over-year to $ 439 billion in 2020.

“Based on current estimates, we believe Amazon could overtake Walmart to become the largest US retailer by 2022,” JP Morgan analysts Christopher Horvers and Doug Anmuth wrote on Friday.

Horvers and Anmuth highlighted a few factors they believe are driving Amazon’s top-of-the-line growth, including an expansion into “large and under-penetrated categories” such as groceries and clothing, strong growth in outside seller sales, and the “first flyer” . Amazon CEO Jeff Bezos said in April that the company now has more than 200 million Prime subscribers, up from 150 million in early 2020.

The coronavirus pandemic rapidly accelerated e-commerce adoption and consolidated Amazon’s dominance in the retail space. Consumers stuck at home turned to Amazon for a plethora of products 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.

Amazon’s pandemic-fueled sales surge has helped it grow its share of the e-commerce market. JPMorgan estimates that Amazon expanded its share of the US e-commerce market to 39% in 2020, up from 24% in 2014.

The accelerated adoption of e-commerce has also provided a boost to other areas of Amazon’s business.

Amazon is on track to “become one of the largest courier companies” in the United States, Bank of America analysts wrote in an investigation published Tuesday.

Amazon is estimated to deliver 7 billion packages in 2021, surpassing the roughly 6 billion packages UPS is expected to deliver in the U.S. This year, analysts wrote, citing figures from MWPVL International, a consulting firm from supply chain and logistics.

In recent years, Amazon has quietly built a shipping operation that rivals UPS, FedEx, and the US Postal Service. It maintains a growing network of warehouses and last-mile delivery stations, and an expanding logistics operation. with planes, trucks and vans.

This has allowed Amazon to deliver the majority of its own orders. Amazon currently delivers packages for other companies in the UK and could one day expand that service to the US.

MWPVL estimates that Amazon handled about 5 billion of the 7.35 billion packages it shipped in 2020. UPS and USPS handled the other 1.25 billion and 1.1 billion, respectively, according to analysts at Bank of America. .

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