Next Year Amazon will Surpass Wal-Mart to Become the Largest Retailer in the United States

Wal-Mart has dominated the US retail industry for decades, and Amazon, an e-commerce site started by book e-commerce, has been working hard to catch up. The new covid-19 epidemic that has lasted for more than a year has accelerated the rapid development of e-commerce in the United States, making e-commerce leader Amazon catch up faster.

A research report released by JP Morgan Chase on Friday predicts that Amazon is expected to surpass Wal-Mart in the next year (2022) and become the largest retailer in the United States. The report pointed out that Amazon‘s US retail business scale is undoubtedly the fastest growing. From 2014 to 2020, Amazon’s gross merchandise transaction (GMV) growth rate in the US market is much faster than the overall US retail and e-commerce scale.

Although Wal-Mart and Amazon do not separately list GMV data in their quarterly earnings reports, JP Morgan analysts pointed out that Amazon’s GMV in 2020 increased by 41% year-on-year to US$316 billion; Wal-Mart’s GMV is estimated to increase by 10% to US$439 billion.

“Based on current estimates, we think Amazon may surpass Wal-Mart to become the largest retailer in the United States in 2022,” JP Morgan analysts Christopher Horvers and Doug Anmuth wrote in a report on Friday.

Their reasons include: business expansion to “large and insufficiently penetrated categories” (such as groceries and clothing); the rapid growth of third-party sellers and membership value-added services (Prime).

Amazon CEO Bezos said in April that the company now has more than 200 million Prime subscribers, up from 150 million in early 2020.

The covid-19  epidemic has accelerated the development of e-commerce in the United States and further consolidated Amazon’s dominant position in the retail sector. JPMorgan Chase estimates that Amazon’s share of the US e-commerce market has increased from 24% in 2014 to 39% in 2020.

The accelerated development of e-commerce has also provided impetus for Amazon’s business in other areas. A recent research report by Bank of America analysts has predicted that Amazon is expected to “become one of the largest express delivery companies in the United States.” Analysts cited data from the supply chain and logistics consulting company MPVVL International as saying that Amazon is expected to deliver 7 billion parcels in 2021, surpassing UPS’s approximately 6 billion.

In recent years, Amazon has quietly established a freight business that can compete with companies such as UPS, FedEx, and the United States Postal Service. The company has an ever-expanding network of warehouses and last-mile distribution stations, as well as a huge logistics business with airplanes, trucks and vans. This allows Amazon to deliver most of its own orders.