Insider Intelligence: Amazon has the largest market share of US e-commerce at ~39%, but it grew by just 0.2% in 2021 and 2022 so far, the slowest rate in years
Tech giant remains nation's leading online retailer, but signs of weakness have emerged recently
Wall Street JournalSebastian Herrera
Context & Ripple Effects
The 2020 online-shopping surge lifted Amazon’s US retail business sharply, but it also coincided with share gains by Target and Walmart. Amazon’s earlier expansion therefore did not eliminate competitive momentum among large omnichannel retailers.
The weak share advance marks a break from the pandemic-era acceleration. Later coverage of single-digit US online-sales growth in 2022 reinforces that Amazon is confronting a slower-growing market rather than simply a temporary comparison issue.
First-order effects
Amazon remains the dominant US online retailer, but its near-flat share trajectory removes the rapid market-share expansion that had strengthened its retail lead.
Target and Walmart retain more room to defend the online-share gains reported during 2020 because Amazon is no longer adding share at its prior pace.
Second-order effects
As total online-sales growth slows, Amazon, Target, and Walmart must increasingly compete for existing e-commerce spending rather than rely on market expansion to lift sales.
A slower Amazon retail-growth profile raises the strategic value of each retailer’s ability to connect online sales with its broader retail operation, since the gap in e-commerce momentum is narrowing.
Third-order effects
If slow share gains persist, US e-commerce will look less like a market steadily concentrating around Amazon and more like one divided among several large retail platforms.
The later pattern of slowing Amazon online-stores growth suggests that retail scale alone may no longer deliver the share gains seen during the exceptional 2020 demand surge.
The trend: US e-commerce is moving from pandemic-driven concentration toward slower growth and more contested share among Amazon, Target, and Walmart.
Amazon's search results no longer seem to be about making it easy to find what you were looking for, which is a real impediment. I don't have that issue with other online stores. https://www.wsj.com/...
Amazon's online retail engine is showing signs of stalling. The e-commerce giant reported its slowest sales growth in roughly two decades and revenue at its main online-shopping business segment has stagnated for six months. https://www.wsj.com/... via @WSJ
Amazon's multibillion-dollar hiring spree and logistics build-out, necessary to keep up with demand during the pandemic, have yielded painful results in a period of inflation and economic contraction https://www.wsj.com/...
“Free cash flow decreased to an outflow of $18.6 billion for the trailing twelve months, compared with an inflow of $26.4 billion for the trailing twelve months ended March 31, 2021.” https://www.businesswire.com/ ... For Amazon of all companies, famously FCF-focused, this seems.…
$AMZN was obviously in a great place to take advantage of slack labor markets in 2010-2020. And then the 2020-2021 goods boom suited them as well. But now what? End of slack labor plus unionization momentum. Plus higher inflation, potential disruptions out of China etc.
This might be the most important (and easy-to-grok) entry in Amazon's Q1 earnings statement. Huge slowdown in North American growth, actual retraction internationally (after an explosion last year), AWS continues to accelerate growth and has a bigger share in overall net sales ht…
Amazon delivers disappointing Q2 results citing higher expenses and operational costs. I wonder how that squeeze is going to impact how they run Twitch? A stronger profit focus on the top will bleed down to all viewers and creators. https://www.reuters.com/...
🤔 “This was a tough quarter for Amazon with trends across every key area of the business heading in the wrong direction and a weak outlook for Q2” [...] “The AWS division increased revenue 37% to $18.4 billion, slightly ahead of analysts' estimates.” https://www.reuters.com/...
“Today, as we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network...” https://ir.aboutamazon.com/...
@plantmath1 That's true yes. $AMZN just finished a capex cycle for their core biz. And will now reap the benefits. $FB is saying they will investment outside their core biz more or less depending on how their core biz does.
$AMZN and $FB one day apart: “we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies” - $AMZN “planning to slow the pace of our investments” - $FB
Anecdotal empiricism, but I have an old Amazon Associates program email address at which I still get notices. I have never seen such aggressive promotion from Amazon as I have of late as it tries to drive revenue. It's arguably a tell, it seems. https://twitter.com/... https://tw…
Amazon CEO @AndyJassy says in earnings release that the company doubled its entire warehouse fulfillment network in just two years during the pandemic. “Today...are teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.”
Amazon posts loss of $3.8 billion for the quarter. Incuding: “First quarter 2022 net loss includes a pre-tax valuation loss of *$7.6 billion* included in non-operating expense from our common stock investment in Rivian” Oof.
$AMZN -8% AH after cutting 2Q rev growth guidance to +5% (from +11% est) and 2Q operating profit of -$1B to +$3B (Street +$6.8B). AWS 1Q rev on track. Mgmt commentary about growing too fast and this taking some time to fix is concerning.
Amazon's earnings for Q1 are out (down year-over-year in every category except revenue). Here is its projection for Q2: https://ir.aboutamazon.com/... https://twitter.com/...
$AMZN Q1 2022: - Revenue up 7% to $116.4 billion - Net loss of $3.8 billion - AWS up 37% - Subscriptions up 11% - Advertising services up 23% - North American sales up 8% - International sales down 6% - Employees up 28%