Amazon (AMZN) is Killing It in the Online Retail Segment

We all know Amazon is dominating the online retail market but just how wide is the margin between competitors?

amazon.com AMZN

Amazon.com, Inc. (NASDAQ:AMZN), the world’s largest online retailer, is leaving competitors in the dust but if you ever wondered just how well they are doing, this chart by market research firm Baird Equity Research should give you an idea.

According to Baird Equity Research, Amazon sold 6 times more online than 8 of the largest big box retailers combined. The research firm estimated Amazon’s earnings to $59 billion worth of products sold online during the second quarter of 2016. In addition, the retailer’s 8 closest rivals on the list – including  Walmart, Target, and BestBuy – sold about $10 billion worth of products in the same period combined.

As for Amazon’s growth in online sales volume, it is about 10 times higher than 8 of its closest competitors combined. The online retailer saw its sales volume or gross merchandise volume (GMV) increase $14 billion year-over-year in the second quarter of 2016. Meanwhile, its 8 closest rivals only saw their online sales volume increase to a disappointing $1.3 billion over the same period. According to Baird, this puts Amazon’s growth to 10 times in online sales volume than 8 of its other competitors combined.

In addition, Amazon generated about ~30% of US retail sales growth. According to data released by the Department of Commerce, Amazon’s US retail sales, which include sales transacted via its physical stores, grew by a staggering $31.5 billion year-over-year in the second quarter of this year. The Baird chart illustrates that Amazon’s North American GMV is estimated to have spiked about $9.1 billion year-over-year in the same period. This means Amazon drove 30% of total US retails sales growth, an extraordinary feat despite having almost zero presence in the physical retail space.

Last June, Business Insider reported that Amazon is set to expand in 5 “mega categories,” which Baird believes could open a $1.7 trillion market share opportunity altogether. The categories include clothing, home & kitchen, health & beauty as well as grocery and office equipment.

According to the report, Amazon owns about less than 5% of the retail shares in the five categories but this could jump significantly once Amazon increases its presences in these segments. Baird noted that the online retailer’s vast customer base, improving service infrastructure, and growing online commerce market will give Amazon the edge it needs to make a mark in these markets.

“Amazon currently has less than 5% market share in each of these five mega-categories representing $1.7 trillion in market share opportunity, addressable we believe due to an increasingly loyal customer base, increasingly sophisticated fulfillment and logistics network, and the increasing adoption of online shopping across traditionally bricks-and-mortar product lines,” Baird analyst Colin Sebastian wrote.

“Amazon continues to add product selection at a rapid (double-digit %) clip, which we view as one of the fundamental drivers of unit sales growth.”

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