According to an eMarketer forecast, Amazon.com will represent just about half of e-commerce sales in the U.S. this year, but that figure comes with an important qualification.
Although Amazon’s share will hit 49.1% of the e-commerce market, eMarketer asserted, Marketplace has reached 68% of the company’s sales. With that, issues regarding Prime purchase eligibility, returns, counterfeit goods and product misrepresentation that impact sales generated by the third-party Marketplace participants could become more challenging. It may only be a small minority, but dealing with Marketplace retailers who don’t necessarily provide Amazon shoppers with a square deal could become a drag on the company’s growth.
Not that Amazon is likely to back off the Marketplace operation, and the company has been taking steps to ensure it proves satisfactory to consumers including, for example, the development of programs to address counterfeit products and stepping in to helps consumers when they are dissatisfied with transactions.
“The continued growth of Amazon’s Marketplace makes sense on a number of levels,” said Andrew Lipsman, eMarketer principal analyst. “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.”
In addition, investments and initiatives by competitors, such as Walmart’s grocery pickup program, could make the marketplace a tougher environment for the e-commerce leader.
Food and beverage will be a major consideration for Amazon going forward, said eMarketer senior analyst Patricia Orsini.
“Amazon’s strategy for food and beverage is no different, in some respects, than it was for books: dominate the category,” she said. “However, e-commerce 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.”
Another issue that could affect Amazon going forward is private label, a concern not only of other retailers but brand operators as well. “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.
In the eMarketer forecast, Amazon would gain substantially from the 43.5% share recorded in last year’s outlook. The market research firm noted that Amazon will control almost 5% of the total U.S. retail market, online and offline included, with $258.22 billion in retail sales this year, up 29.2% over last year. Computer and consumer electronics is the leading product category for Amazon, and will generate U.S. sales of $65.82 billion this year, representing more than a quarter of its retail ecommerce business.
The rest of the eMarketer e-commerce market share leaders are:
- eBay, 6.6%
- Apple, 3.9%
- Walmart, 3.7%
- The Home Depot, 1.5%
- Best Buy, 1.3%
- QVC Group, 1.2%
- Macy’s 1.2%
- Costco, 1.2%
- Wayfair, 1.1%