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Amazon is on track to overtake Walmart as the largest U.S. retailer in 2022, according to a JPMorgan study released on 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 watched industry metric used to measure the total value of merchandise sold over a period of time, grew “much faster.” than adjusted US retail sales and US e-commerce, analysts say.
Neither Amazon nor Walmart bust out GMV in their quarterly results, but JPMorgan believes Amazon’s GMV is growing faster than its biggest retail competitor. JPMorgan analysts said Amazon’s GMV in 2020 climbed 41% year-on-year to $ 316 billion, while Walmart’s GMV rose 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 in 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 revenue growth, including expansion into “broad and under-penetrated categories” such as groceries and clothing, a strong sales growth from third-party sellers and the “Prime Steering Wheel”. Amazon CEO Jeff Bezos said in April that the company now has more than 200 million Prime subscribers, up from 150 million at the start of 2020.
The coronavirus pandemic quickly accelerated e-commerce adoption and cemented Amazon’s dominance in the retail space. Consumers stranded at home have turned to Amazon for a plethora of products ranging from toilet paper to workout equipment. They also relied on Amazon for services they might not otherwise have considered, such as online grocery delivery.
Amazon’s sales surge fueled by the pandemic has helped it grow its share of the e-commerce market. JPMorgan estimates that Amazon increased its share of the U.S. e-commerce market to 39% in 2020, from 24% in 2014.
The accelerated adoption of e-commerce has also given a boost to other areas of Amazon’s business.
Amazon is on track to “become one of the largest delivery companies” in the United States, Bank of America analysts wrote in a study released Tuesday.
Amazon is expected to deliver 7 billion packages in 2021, surpassing the roughly 6 billion packages UPS is expected to deliver to the United States this year, analysts wrote, citing figures from MWPVL International, a supply chain consultancy firm. and in logistics.
In recent years, Amazon has quietly built a shipping operation that rivals UPS, FedEx, and the US Postal Service. It maintains an ever-growing network of warehouses and last mile delivery stations, as well as a sprawling logistics operation with planes, trucks and vans.
This allowed Amazon to deliver most of its own orders. Amazon is currently providing plans for other businesses in the UK and may one day expand this service to the US.
MWPVL estimates that Amazon processed about 5 billion of the 7.35 billion packages shipped in 2020. UPS and USPS processed the remaining 1.25 billion and 1.1 billion, respectively, according to analysts at Bank of America.
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