Amazon is set to clear $258.22 billion in US retail sales in 2018, according to the latest eMarketer’s figures, which will work out to 49.1% of all online retail spend in the country, and 5% of all retail sales.
Amazon’s next-closest competitor, eBay, is a very, very distant second at 6.6%, and Apple in third at 3.9%.
Walmart, the world’s biggest retailer when counting physical stores, remains a work in progress in e-commerce and comes in behind Apple with 3.7% of online sales in the US.
The figures — which eMarketer said are estimates “based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies” — are also remarkable not because of their size, but because of Amazon’s pace has not slowed down. Its sales are up 29.2% versus a year ago, when it commanded 43% of all e-commerce retail sales.
Amazon’s growth is being driven by its Marketplace — the platform where Amazon allows third-party sellers to use its retail and (if they choose) logistics infrastructure to sell and deliver items to Amazon shoppers. This currently accounts for 68% of all retail sales, working out to nearly $176 billion, versus 32% for Amazon’s direct sales.
eMarketer projects that by the end of this year, Marketplace’s share will be more than double that of Amazon’s own sales.
“The continued growth of Amazon’s Marketplace makes sense on a number of levels,” eMarketer principal analyst Andrew Lipsman said in the eMarketer report. “More buyers transacting more often on Amazon will naturally attract third-party sellers. But because third-party transactions are also more profitable, Amazon has every incentive to make the process as seamless as possible for those selling on the platform.”
RPA Perspective In terms of popular categories, consumer electronics and tech continue to be the leading product category: eMarketer projects sales of $65.82 billion, around a quarter of all turnover. Second will be fashion and accessories, which will pull in $39.88 billion of sales. Third in 2018 are health, personal care and beauty with $16 billion. Fourth is food and beverage at a distant $4.75 billion.
All of these are already up by 38% or more over a year ago but what is notable is how Amazon has been investing in being a direct player in each of the categories as well.
In tech, it has its Kindles and Fire tablets, Fire TV, and its Alexa-powered Echo devices. Fashion is being pushed heavily in the company’s private-label and it recently announced that it was acquiring online drug seller PillPack for $1 billion, which will be a major lever in its wider health products and services strategy. And lastly, there is Amazon’s acquisition of Whole Foods and its much wider play around food and its server-free physical shops. The physical aspect, eMarketer believes, will play a strong role in Amazon’s growth in this category.
“Amazon’s strategy for food and beverage is no different, in some respects, than it was for books—dominate the category,” eMarketer senior analyst Patricia Orsini said in the report. “However, e-commerce in the grocery sector is a challenge. Share of online sales in this category is low because most people, for a host of reasons, prefer to buy food in brick-and-mortar stores. Amazon has an advantage because its shopper base is comfortable with shopping online. Along with insights gathered about Whole Foods shoppers, Amazon probably has the best chance of converting in-store grocery buyers to online grocery buyers.”
