Amazon's market share was dramatically downgraded, and it could be a weirdly good thing for Jeff Bezos

  • Amazon is America’s second-biggest company and was recently rated the most valuable brand on the planet, but its estimated market share was just dramatically cut.
  • eMarketer reduced its estimate for Amazon’s market share of 2019 online sales in the US to 37.7% from 47% after the tech firm published figures on third-party sales.
  • The downgrade could actually be good news for Amazon, which is trying to play down its size at a time when tech antitrust investigations may be looming.
  • Visit BusinessInsider.com for more stories.

A new estimate of Amazon’s market share indicates the tech giant may not be as dominant as we once thought.

Amazon is the second-biggest company in America, with a market cap of $US921 billion, and this week was named the most valuable brand on the planet by BrandZ.

But its estimated share of US e-commerce sales was dramatically cut by eMarketer, which is frequently cited as a reliable source for Amazon’s market share. eMarketer is owned by Insider Inc.’s parent company, Axel Springer, and is set to combine next year with Insider Inc.’s research unit, BI Intelligence.

The research firm downgraded its percentage of 2019 online retail sales in the US to 37.7% from 47%, The Information reported on Thursday.

eMarketer told Business Insider that it reassessed its estimates after CEO Jeff Bezos announced in his annual letter to shareholders in April that sales from Amazon’s third-party sellers had come to make up more than 58% of the physical gross merchandise sold on Amazon. These sales have grown from $US0.1 billion in 1999 to $US160 billion in 2018.

“Third-party sellers are kicking our first-party butt,” Bezos said.

A representative for eMarketer told Business Insider that because of this new information the firm was able to update “a key input” into its e-commerce sales model for Amazon. This had the effect of lowering its previous estimates for Amazon’s sales and market share, the representative added.


Read more:
The FTC is asking Amazon’s rivals if they are being crushed by Jeff Bezos’ company

The revised market-share estimate could actually be good news for Bezos’ company, which is trying to play down its size at a time when tech antitrust investigations may be looming.

Earlier this month, The Washington Post reported that the Federal Trade Commission and the Department of Justice had carved up responsibility for any antitrust investigations concerning Amazon and Google. Under this new agreement, the FTC has oversight of Amazon.

“There is something going on in terms of monopoly,” US President Donald Trump said Monday about the possibility of investigations into Apple, Amazon, Facebook, and Google. “We’re going to look at it,” he added.

The main concern for both regulators is that Amazon is so dominant that it’s impossible for others to compete. If its market share is seen to be less dominant than once thought, this should play into its favour.

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