Amazon Data 2024

Worldwide Domination, AI to Drive Network Effects Into Overdrive, A New Chapter - From Retailer to Service Provider

Introduction

The retail landscape has shifted dramatically. Amazon now reigns supreme, reshaping consumer behavior and challenging traditional business models.

This comprehensive report offers a groundbreaking analysis of Amazon's dominance, providing you with the unparalleled insights you need to navigate the evolving retail ecosystem. Backed by exclusive data and unparalleled insights, our analysis uncovers the secrets behind Amazon's meteoric rise and forecasts its future impact on the industry.

This report is tailored for key decision makers across retail companies, FMCG brands, professional services firms, logistics providers, advertising agencies, and beyond. Whether you're a CEO, CMO, or supply chain manager, this document equips you with the knowledge to navigate the evolving retail landscape with confidence.

As Amazon continues to redefine the boundaries of retailing, staying informed is more crucial than ever. With our comprehensive analysis, you'll gain a competitive edge in navigating the complex dynamics of the retail landscape. Embrace the future with confidence, armed with insights that transcend conventional wisdom and pave the way for strategic success.

Predicting the Future of Retail:  Our analysts paint a vivid picture of how Amazon will continue to reshape the industry. Identify potential opportunities and potential threats to capitalize on or mitigate.

Some Highlights

In a major reversal, Amazon’s reported revenue of US $574.8bn in 2023 is now bigger than its pure GMV of US $564.8bn in the same year. GMV here is defined as online sales of 1P and 3P only - and excludes the revenue from AWS, FBA fees, Prime fees, and all advertising income. This represents a big shift from the past when GMV used to be double the amount of revenue Amazon posted and showcased the impact Amazon and its online marketplaces had on online and offline retailing. 

This also shows how far Amazon has moved to a “Chinese online model” away from making money primarily on the retailing of products. The company now focuses on services (obviously AWS and FBA being prime examples) sold to its 3P sellers, and on its platform search and product discovery are now driven by advertising. From a consumer’s perspective, this has resulted in some enshittification of the Amazon app, as organic search has been swamped by advertising, sponsored products, and the like.

Amazon advertising is now not only the company’s most profitable business arm but has transformed how products sell and how much it costs to sell them. Retail advertising will only really work for retailers with huge captive audiences. In other words, advertising looks to be another area where Amazon remains “unchallengeable” for the foreseeable future, as no other company has such a competitive moat of selection, low prices, and logistics footprint - and crucially shoppers and the network effects flowing from this.

The publisher believes Amazon has just shy of 1bn customer accounts globally now - which amounts to one in eight persons on the globe being an Amazon shopper. Moreover, the AOV on the platform keeps growing year on year.

Amazon has found that once customers start feeling comfortable with the site, they start to cross shop across categories, but the best driver of this behaviour is of course prime.  Prime keeps growing, now at more than 300m members globally, while other streaming services are suffering. Moreover, Prime members are being further monetised now, as new “TV streaming” advertising will become super targeted and personalised - with all the data history across platforms and touchpoints Amazon can access on shoppers.

The marketplace, now at 60% of unit sales, has always been integral to Amazon’s success. The company now takes 40% of 3P transactions as a base rate, and if advertising is added on top of these fees, the take rate goes beyond 50%. Basically, every second dollar of marketplace spend is going into Amazon’s pockets.

That said Amazon also provides impressive service levels for this spend in return, such as discoverability, advertising on and off Amazon and its effects, but also FBA, warehousing, logistics all the way from China (supply chain by Amazon), payment processing and perhaps crucially for prime eligible products one day or same day delivery speeds. 

For 3P sellers and especially the bigger brands this means that many will sell on Amazon just at break even or on a loss making basis. If one adds further costs, not captured in the take rate and advertising calculations, such as returns, and discounts given to take part in Amazon prime days and the like the picture gets quite gloomy.

Looking ahead, Amazon is going to invest in more robotisation in all its business operations from warehouse operations to drone delivery and its somewhat struggling stores business (we expect further advances in its just walk out technology and the One/ palm checkouts). The company will also strengthen its AWS provision (on which a multitude of AI models are running) and try to leverage the promise of AI in all its business units, not just Alexa or the Just walk out stores. AI has always played a crucial role in Amazon’s backend - from its pricing and discoverability algorithms to demand forecasting and routing options and the like. At the moment Amazon’s chatbots are used for product images and descriptions by sellers, but the company has now also launched a consumer-facing bot. 

But there is also trouble ahead. While many observers expect the FTC case to end in a settlement, this is not a given. Threats to Amazon are also emerging from abroad in the form of Shein and Temu, with both Chinese players using slightly different business models (quasi vertical integration and a reverse supply chain signal flow for Shein and a pureplay 3P marketplace for Temu) to attack Amazon. Moreover, if future e-commerce or social media will all be about video - then TikTok, which excels at live-stream shopping, could become a serious threat.

That said, the company has already entered a new phase in its history and development. With pure GMV smaller than revenues, the company has cemented its move away from its historic phase 1 business model into becoming more of a service provider (“becoming the pipeline through which everything flows”), and this change in direction will be further driven along by AI in future.

Features & Benefits

Exclusive Data & Unmatched Depth not available anywhere else, derived from our Best seller tracker tool, Amazon data, and shopper research. Forget generic statistics. We leverage proprietary data sources and cutting-edge analytics to deliver a nuanced understanding of Amazon's inner workings, consumer trends within its platform, and its impact across industries.

Unprecedented Market Insights: Get access to proprietary data that sheds light on Amazon's unrivalled market position.

The Consumer Conundrum: Uncover the motivations and behaviors of Amazon's loyal customer base. Understand how Amazon fosters engagement and loyalty, and leverage these insights to adapt your own strategies. Gain a 360 degree view of Amazon Shopper Insight and Analysis

GMV, users, average spend, prime users, and prime spend per market, show Amazon white spaces and potential and make clear how big Amazon and the opportunity really is. From market share dynamics to disruptive innovations, we leave no stone unturned in uncovering the forces driving Amazon's dominance.

Helps 3P sellers and brands decide which Amazon markets to launch into and facilitates retailers’ understanding of how powerful Amazon is in key markets

Amazon's DNA: Demystifying the Business Model: We delve deep into the intricate mechanisms that power Amazon's success. Discover the secrets behind Amazon's success and how its revolutionary approach is reshaping retail paradigms. Analyze their logistics mastery, data-driven decisionmaking, and relentless focus on customer experience.

Competitive Analysis: Benchmark your company against Amazon's best practices and identify strategic opportunities for growth and differentiation.

Actionable Intelligence: We translate complex data into actionable insights you can readily implement. Gain a competitive edge by understanding Amazon's strategies, weaknesses, and potential blind spots.

Strategic Forecasts: Anticipate future trends and disruptions, empowering you to stay ahead of the curve in an ever-evolving industry. This report isn't just a retrospective. Our team of industry experts forecasts how Amazon will continue to disrupt the market, empowering you to make strategic decisions that stay ahead of the curve.

Key Questions Answered

• What is the breakdown of sales between Amazon's online stores, 1P (first-party), and 3P (third-party) sellers, including their growth rates and market share from 2017 to 2023? How big are Amazon’s marketplaces in its respective markets? Where is the fastest growth coming from? What are the GMV totals, the 3P and 1P sales in Amazon’s key markets?
• What are the user numbers for Amazon globally and in specific regions from 2018 to 2023, and what insights can be drawn from these figures? How many active customers does Amazon have in total and per country website? What is the average spend? Is this going up post Pandemic?
• How does the average annual and monthly GMV spend vary across different countries and regions, including for Prime users? How much do these shoppers spend on average in each market on 1P and 3P? How much has the average order value/ transaction spend increased in 2023 vs 2022 and 2021?
• What are the trends in Prime user numbers, and average spending, from 2018 to 2023? Which country has the highest penetration? How much do prime members spend on average? How much more were they spending than non-prime shoppers in 2023? Are they renewing their subscriptions?
• How much faster does 3P grow over 1P? How big is the take rate (including and excluding ad spend)? Is the current take rate already threatening the profitability of sellers?
• What are Amazon’s next moves in AI? How is Amazon leveraging AI technology, such as its investment in Anthropic and the launch of Q, to enhance customer experience and marketplace operations?
• What is the outlook for Amazon's future growth and performance? How will the FTC case affect Amazon’s future? Will Amazon be able to shake off the threat from Shein and Temu?