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                  Amazon to overtake Walmart as largest US retailer by 2025: report

                  Apr '21
                  Pic: Koshiro K / Shutterstock.com
                  Pic: Koshiro K / Shutterstock.com
                  Amazon is set to overtake Walmart as the largest retailer in the US within the next four years. Amazon GMV sales will reach $631.6 billion by 2025, representing a compound annual growth rate (CAGR) of 14 per cent between 2020 and 2025, according to a new report. Walmart total sales will grow at 3.9 per cent CAGR, reaching $523.3 billion by 2025.

                  This comes as ecommerce in the US continues its meteoric rise, with US online sales expected to increase to more than $1 trillion ($1.204 trillion) by 2025, a 41 per cent growth on 2020 ($710.7 billion), which in itself was a bumper year for ecommerce as social distancing forced people online to fill the time and buy household essentials, says the report from Edge by Ascential’s market research arm, Retail Insight.

                  Ecommerce sales grew about 30 per cent in 2020 from $546.3 billion in 2019. In 2018, ecommerce sales were $471.3 billion.  

                  The United States Retail Landscape and Market Planning Report 2021 shows that Walmart sales will grow at 2020-2025 CAGR of 3.9 per cent to reach $523.3 billion by 2025, boosted by its e-commerce offering. Data from Edge by Ascential reveals that Walmart’s e-commerce sales are set to grow at a 5-year CAGR of 14.9 per cent from $43.6 billion in 2020 to $87.5 billion in 2025, accounting for 16.7 per cent of total retailer sales in 2025.

                  Meanwhile, Amazon will continue to grow its third-party marketplace business model, which will account for 66 per cent of gross merchandise value (GMV) sales in 2025, up from 60 per cent in 2020.    

                  This offers brands an opportunity to embrace the e-commerce boom by piggybacking on the marketplace’s enormous success, formidable investment in customer acquisition and growing reputation for live selling, the report said.

                  Data from Edge by Ascential shows that Kroger will remain the third largest retailer in the US, with sales growing at a CAGR of 3.6 per cent to reach $166.6 billion in sales by 2025. However, Costco, which is the fourth largest, is expected to invest heavily in its digital capabilities, with its online sales set to increase by 47 per cent over the same period, reaching $15.3 billion in 2025.

                  Edge by Ascential analysts forecast that e-commerce penetration in the US will grow from 22.1 per cent in 2020 to account for 29 per cent of total chain retail sales by 2025. This will be driven by a new generation of customers with greater expectations of immediacy and personalisation. Over the next few years, Generation Z will become a bigger share of wallet for brands and retailers, who will need to focus investment in online and engage with the digital ecosystem in order to win market share.  

                  Fibre2Fashion News Desk (RKS)

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                  April 2021

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