Company’s ecommerce business will jump almost 30% in 2018
When it comes to the US ecommerce market, Amazon is leaving the competition in the dust. This year, the online shopping juggernaut will capture 49.1% of the market, according to eMarketer’s latest forecast on the top 10 US ecommerce retailers, up from a 43.5% share last year. Amazon now controls nearly 5% of the total US retail market (online and offline).
Amazon will generate $258.22 billion in US retail ecommerce sales this year, up 29.2% over last year. Amazon’s Marketplace sales will represent an increasingly dominant portion of its ecommerce business—68.0% this year, compared with 32.0% for Amazon direct sales. By the end of 2018, sales generated from Amazon’s Marketplace will be more than double that of Amazon’s direct sales in the US.
“The continued growth of Amazon’s Marketplace makes sense on a number of levels,” eMarketer principal analyst Andrew Lipsman said. “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.”
Computer and consumer electronics is the leading product category for Amazon, with sales of $65.82 billion in the US this year, representing more than a quarter of its retail ecommerce business.
In 2017, apparel and accessories surpassed books and music to become the second largest category. Apparel sales will grow more than 38% this year to reach $39.88 billion in the US. This category will represent 15.4% of Amazon’s ecommerce business, and 38.5% of all online apparel sales in the US.
But Amazon’s private-label push is being met with apprehension by several brands and retailers.
“While they are dependent on Amazon as a selling channel, they also recognize the threat to their brands should Amazon decide to compete by introducing its own private labels,” Lipsman said.
Other fast-growing categories for Amazon are food and beverage* and health, personal care and beauty. Food and beverage will grow more than 40% this year, while health and beauty will jump nearly 38%. Still, both categories represent just a small portion of Amazon’s US retail ecommerce sales.
“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. “However, ecommerce 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.”
