Amazon’s dominance is frequently discussed, but not always quantified. In a new Morgan Stanley note published Tuesday, researchers identified exactly how powerful the Seattle-based retail giant really is.
Projections from current data estimate that e-commerce sales will comprise around 13% of all retail sales over the next two years. And of that, Amazon should have 5% in 2018, and 6% in 2019.
Put another way, Amazon is projected to make up almost half (46%) of online retail sales, with $142 billion in revenue next year.
Looking back over the past decade shows how far Amazon – with its vast supply, free shipping for Prime members and ability to undercut others on price – has come to dominate the online space: Back in 2008 when e-commerce sales were just 5% of retail overall, Amazon was a mere 1%. These numbers are also a reminder that retail battles are still very much fought offline, despite brick-and-mortar stores’ online woes.
How this might play in a recession
Morgan Stanley’s analysis points to what this might look like if another recession were to hit. Would Amazon’s size make its attrition manageable? Would the expenses prove too much to bear? There are very few clues to help with guessing how Amazon would fare in a recession based on the past.
Morgan Stanley noted that Amazon has traditionally seen higher margins during periods of economic downturn and lower margins in the booms, as the company invests in itself in good times. In terms of numbers, Amazon’s sales decelerated 13% during the Great Recession, in-line or slightly better than ecommerce’s 16% chill.
Ethan Wolff-Mann is a writer at Yahoo Finance. Follow him on Twitter @ewolffmann. Confidential tip line: FinanceTips[at]oath[.com].
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