The secular transition of the retail market from brick-and-mortar stores to online and omnichannel models is one of the biggest investing trends in the retail sector today. Traditional physical retailers have struggled to adapt their models to compete with Amazon.com, Inc. AMZN and other companies that are gobbling up market share.
On Monday, Bank of America analyst Justin Post compiled an update on the latest e-commerce market share trends so investors can see which companies are dominating the space.
Bank of America estimates Amazon generated $79.8 billion in U.S. gross merchandise volume in the fourth quarter of 2019, up 19% from a year ago. At the same time, Post estimates eBay Inc EBAY generated $8.9 billion in GMV, down 8.3%. Bank of America estimates fourth-quarter online GMV growth for Walmart Inc WMT and Target Corporation TGT of 23.6% and 19%, respectively.
“Our conclusion is that Walmart and Target are seeing notable progress in their Online offering and customer adoption, but Online volumes still do not have large enough relative scale to materially impact/disrupt Amazon,” Post wrote in a note.
Bank of America estimates Amazon currently has about 44% of U.S. e-commerce market share, up from 40% in 2018. Walmart is a distant second at just 7% followed by eBay at 5% and Target at just 2%.
2020 And Beyond
Looking ahead to 2020, Bank of America is projecting 15.7% online GMV growth for Amazon, -5.8% growth for eBay, 23.1% growth for Walmart and 18% growth for Target. Post anticipates these “big four” U.S. e-commerce leaders will capture a combined 56% of the 2020 online shopping market. He’s projecting total U.S. online GMV will grow 13% this year to reach $672 billion.
Bank of America estimates Amazon will add $41 billion in U.S. GMV this year, while Walmart and Target will add a combined $12 billion.
Post is particularly bullish on Amazon given the company has now seemingly passed the investment phase of its free One-Day shipping expansion.
To nobody’s surprise, Amazon is the clear leader in online sales and will likely remain in that position indefinitely. The good news for Walmart and Target investors is that both companies are gaining market share in the massive and rapidly-growing global online sales market. There will certainly be plenty of room for multiple winners in the long-term.
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