(Image Source: Retail Dive)
With the unexpected pandemic creating the opportunity for e-commerce to bloom, Amazon is estimated to become the largest U.S. retailer by 2025, overtaking Walmart should their growth keep pace.
According to a report by Edge of Ascential, Amazon’s gross merchandise value sales is estimated to hit $631.6 billion by 2025, with total online sales estimated to reach $1 trillion by 2025. On the other hand, Walmart’s growth of domestic sales is estimated at 3.9% yearly, reaching $523.3 billion by 2025.
Amazon has been ranked as Fortune’s biggest company in the world by revenue for several consecutive years. Due to just a couple of years of Walmart’s falling sales growth, Amazon’s rapid growth was able to put Walmart under threat.
According to the report by Edge of Ascential, e-commerce sales in the U.S increased by 30% due to the pandemic’s social restrictions, accelerating Amazon’s growth in sales by 38.4% during this period with the company reaching $236.3 billion in sales.
Most of Amazon’s sales were driven by third-party sellers that sell through the company’s Marketplace platform. Edge of Ascential predicts that third-party sellers will account for up to 67% of Amazon’s gross merchandise by 2025. At the same time, the report estimates Walmart’s e-commerce growth rate to be at 15% per year, a fairly great number, but not enough to keep up with Amazon’s growth.
Deren Baker, CEO of Edge by Ascential, shared, “As Amazon grows to become the largest retailer in the US, brands must understand they cannot win through mass personalization when faced with the huge spending power of large marketplaces like this. They should therefore ensure they have the correct strategies in place to use marketplaces, like Amazon, to reach the right consumers and meet their needs.”