The COVID-19 pandemic dramatically accelerated progress in on-line buying. And arguably the largest winner from that shift was Amazon.com Inc., the main on-line retailer on the planet’s largest markets apart from China and No. 1 within the 2021 Digital Commerce 360 Prime 1000.
Amazon’s income, which had grown by a wholesome 26.3% compound annual charge from 2010 to 2019, leaped forward by 37.6% in 2020, rising to $386.06 billion in 2020 from $280.52 billion a yr earlier. And it’s been extra of the identical in 2021, as Amazon posted 34.8% income progress to succeed in $221.60 billion within the first six months of 2021 versus $164.36 billion in the identical interval of 2020.
The massive progress in income led to a surge in income, partly as a result of extra gross sales meant decrease per-unit achievement prices, as Amazon’s huge funding in its supply community was unfold over extra orders. One other contributor to greater income is the rising share of Amazon gross sales from market sellers, which accounted for 62% of orders in 2020, up from 34% in 2010, based on Digital Commerce 360.
Nonetheless, the largest contributor to Amazon’s income stays its market-leading Amazon Internet Companies (AWS) cloud computing unit, which has accounted for effectively over half of Amazon’s web earnings in recent times and 52.6% within the first half of 2021. Income from promoting can be rising quickly and most of that earnings falls on to the e-retailer’s backside line.
Regardless of spending greater than $11.5 billion in COVID-19-related bills in 2020, Amazon eclipsed its earlier document for quarterly income in every of the 5 three-month intervals from the second quarter of 2020 via the second quarter of 2021.
Even with founder Jeff Bezos stepping down as CEO in July 2021 to take the put up of government chairman, the long run would appear blindingly shiny for Amazon and its new CEO Andy Jassy, the long-term AWS chief. However there’s one ominous cloud in Amazon’s sky: the specter of authorities intervention to curb the corporate’s progress techniques and presumably power it to unload necessary enterprise items.
President Joe Biden has appointed key antitrust positions to distinguished Amazon critics, who argue that Amazon’s dominant place in U.S. ecommerce calls for authorities motion to guard rivals and finally shoppers. They’re proper once they say Amazon is more and more dominant: In 2020, Amazon accounted for 40.7% of U.S. on-line retail gross sales, up from 38.8% in 2019 and solely 11.1% in 2011.
The 2021 Amazon Report from Digital Commerce 360 will present element on many elements of Amazon’s enterprise. However these are the three key traits that emerge:
- Amazon’s huge income and revenue progress through the pandemic.
- The corporate’s growing give attention to essentially the most worthwhile elements of its enterprise.
- Amazon’s rising publicity to authorities regulation.
The specter of new and onerous regulation is actual. A invoice earlier than Congress may power Amazon and different main expertise corporations to separate off necessary elements of their enterprise, whereas a lawsuit filed by the District of Columbia’s lawyer basic seeks to curb a few of Amazon’s enterprise practices, resembling denying the coveted Purchase Field—the place customers should purchase with a single click on—to market sellers that supply an merchandise for much less on different web sites.
However the greatest menace comes from the brand new chairperson of the Federal Commerce Fee, Lina Khan, who got here to prominence by arguing that Amazon’s ecommerce dominance requires a rethinking of U.S. antitrust legislation. Khan has already taken steps that might make it simpler for the FTC to research Amazon and consultants agree there’s extra to come back.
Free of presidency intervention, Amazon’s ecommerce dominance is prone to develop. However the No. 1 on-line retailer within the U.S. can not be assured it will likely be in a position to function with that type of freedom in its residence nation.
The 103-page 2021 Amazon Report consists of:
- An summary of Amazon’s on-line retail gross sales within the U.S. and worldwide.
- Knowledge on the rising function of market sellers on Amazon and the share of North America’s main retailers and types promoting on the platform.
- How Amazon has taken market share in such necessary classes as attire, residence items and grocery.
- An in depth have a look at Amazon’s present brick-and-mortar shops and enlargement plans.
- An evaluation of the regulatory threats to Amazon and their potential affect.
- Greater than 80 charts and graphs.
The 2021 Amazon Report is out there as a downloadable PDF for $499. It’s also included in our Gold and Platinum memberships, which offer full entry to all of Digital Commerce 360’s printed stories and sure on-line retailer databases.
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