- In his 2018 letter to shareholders, Jeff Bezos called Amazon a “small player” in retail.
- He says Amazon represents a small percentage of the retail market, and pointed out that ecommerce only makes up a 10% share of retail overall.
- This is, strictly speaking, accurate.
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Jeff Bezos says Amazon is a “small player” in retail. Yes, really.
In his 2018 letter to shareholders, Jeff Bezos – the world’s richest man – wrote:
“Amazon today remains a small player in global retail. We represent a low single-digit percentage of the retail market, and there are much larger retailers in every country where we operate.”
He attributed this to the fact that Amazon is an online retailer, and the fact that “nearly 90%” of retail remains in the physical realm. (He then used it as a lead to talk about Amazon Go, the company’s new venture into brick-and-mortar “cashless” stores.)
It’s also true that the vast majority of shopping still happens offline. According to the US Department of Commerce, e-commerce accounted for 11.2% of total sales in Q4 of 2018.
However, he omits the wider impact Amazon has had on retail as a whole. Although the online market may be smaller than real-life shopping, Amazon dominates it with a 49% market share of e-retail. The next biggest contender is eBay, with just 6.6%.
Also, while e-commerce makes up roughly a tenth of sales, its chunk of the market is steadily rising year-over-year: The Department of Commerce reported that total e-commerce sales increased 14.2% from 2017 to 2018, and that trend shows no signs of slowing down.
Amazon can continue to expand its empire by absorbing pre-existing retailers, such as the upmarket supermarket chain Whole Foods, which it bought in 2017. Amazon can fuel any future acquisition ambitions with other sides of its business, such as its ever-growing cloud business, AWS, which is currently in the running to win a $US10 billion defence contract from the Pentagon.
So really, it depends on your definition of “small player.”
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