HIGHLIGHTS
- Amazon has beaten one of the most successful retail companies of the past few decades.
- Walmart’s sales have surged during the pandemic, but not comparable to Amazon.
- As Amazon ascended to the throne, people also began to scrutinize them more closely.
FULL ARTICLE
Shopping demand increases sharply during the pandemic
The demand for online shopping of customers has increased rapidly due to the impact of the Covid-19 pandemic. Specifically, customers spent $ 610 billion on Amazon in the 12 months to June 2021. Meanwhile, Walmart recently announced sales of 566 billion USD in the 12 months to 7/2021. If mainland China is included, Alibaba is still the largest retailer in the world because neither Walmart nor Amazon operate in this country.
Amazon has beaten one of the most successful retail companies of the past few decades. It is known that Walmart relies on a retail model with the ability to optimize operating costs so that it can sell goods at lower prices and surpass all previous competitors. However, today’s modern technology has helped retail companies like Amazon to gain advantages and win. The speed of delivery and the variety of goods has helped Amazon attract a huge number of customers and turn many of them into loyal customers.
According to some analyst estimates, Walmart’s sales have surged during the pandemic, but not comparable to Amazon. Walmart’s revenue grew by $24 billion last year, and over the same period, the total value of goods people buy on Amazon has increased by nearly $200 billion. Today, the online retailer has added hundreds of new warehouses and hired about 500,000 workers since the beginning of last year.
Since calculating different metrics should compare between Amazon and Walmart sometimes quite lame. Walmart determining the value of sales is quite simple because all sales are delivered from Walmart’s own warehouse and the data is also published quarterly. In addition, analysts must calculate Amazon’s sales in an “estimated” manner because the majority of what customers buy on the platform comes from third-party sellers. Amazon usually only publishes reports that include the fees Amazon collects from these transactions.
Success associated with notoriety?
As Amazon ascended to the throne, people also began to scrutinize them more closely. The company has begun to receive many complaints about the treatment of workers or the impact on the local and national economy. That’s similar to what Walmart faced during its most explosive growth more than 10 years ago.
To diversify the products users can choose from, Amazon has opened its website to nearly 2 million third-party sellers, in addition to the products it distributes itself. With this model, it is difficult to assess the true size of this company. Amazon only reports the number of fees it collects from sellers rather than the actual amount that flows through their business model. For the last 12 months, Amazon reported total retail sales of $390 billion. Even so, total product sales, including 3rd party transactions, were nearly 60% higher.
Amazon doesn’t regularly publish its GMV (gross transaction value). However, in 2019, under the pressure of antitrust investigations, Amazon announced GMV reaching $ 227 billion as a way to prove that 3rd-party sellers are growing faster than the aspects themselves. products distributed by Amazon.
Phan Quyen
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