Amazon (AMZN) is set to hit a major milestone in 2024: becoming the largest retailer in the United States, according to JP Morgan analysts Doug Anmuth and Brian M.
If this happens, Amazon will dethrone Walmart (WMT) as the largest retailer in the country. It will be a seismic shift, driven by the increasing penetration of e-commerce, faster delivery times, and the stability of Amazon Prime. JP Morgan estimates that in 2023, Amazon’s total merchandise volume, or GMV, will grow 11.6% year over year to $477 billion.
This kind of growth shows the kind of resilience that Wall Street was hoping to see from the e-commerce business, which has been tough in 2022. Although e-commerce companies like Amazon have seen Big spikes during an epidemicLast year saw a decline. Analysts noted that this was the first year since 2009 that US e-commerce grew less than 10%, adding just 8.5% year-over-year, “likely driven by macro pressures, and the emergence of (brick-and-mortar) retailers.” , and the shift towards multi-channel retail in the wake of the pandemic,” Anmuth and Smilek wrote on June 20.
This year, Amazon’s GMV is growing due to “strong growth in less-penetrated categories” like groceries and apparel, “faster delivery speeds, with 2023 tracking toward Amazon’s fastest delivery speeds ever” and “Prime’s flywheel,” the notion that Analysts write that the company’s much-discussed subscription service is building momentum at every step of the trial.
They added that Amazon’s e-commerce business will also benefit from increased B2B capabilities, new financial technology offerings such as Buy With Prime, and estimated growth in the number of third-party sellers operating in the company’s marketplace.
JP Morgan estimates that there will be about 300 million principal members globally by the end of this year. in 2021, said then-CEO Jeff Bezos The company had “more than 200 million Prime members worldwide”.
Amazon also has a massive hold on the e-commerce market, and at the end of 2023, JPMorgan analysts expect the company’s e-commerce market share to be 42.2%, up 106 basis points year-on-year.
JP Morgan’s rise over Amazon is also related to the belief that the company will leverage generative AI in its e-commerce operations, suggesting that “chatGPT-style product research will create an interactive conversational experience” which analysts believe will enable Amazon and other retailers to provide a customer experience. More personalized “AI can also” enable Amazon and other retailers to leverage customer purchase history and data and drive personalized recommendations. “
Big tech government audit
However, there’s a catch: In recent months, so-called “big tech” companies, including Amazon, have seen increased scrutiny from the federal government. Senator Bernie Sanders of Vermont said he was investigating what he described as “bad Amazon.” Security log“Although it Far from the first time Sanders went after Amazon, which is certainly one of the more formal, and unlikely to be the last.
In addition, the Federal Trade Commission (FTC) last week sued Amazon, alleging that the company was deceiving customers into signing up for Amazon Prime and making it difficult to cancel those subscriptions. The lawsuit is a byproduct of a Federal Trade Commission (FTC) investigation that began in 2021. For Amazon, the case is a deathblow to a lawsuit, which alleges that the company violated numerous consumer protection laws and that a court should issue an injunction to stop its subscription practices. on Amazon Prime.
This new lawsuit from Amazon follows the FTC’s actions against several of the biggest names in tech, including Alphabet (GOOG), Microsoft (MSFT), Meta (META), and Apple (APPL).
Ali Garfinkel Senior Technical Correspondent at Yahoo Finance. Follow her on Twitter at @employee and on linkedin.
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