In this competitor analysis tutorial, we will discuss Amazon competitors in detail. Amazon Inc. is the largest e-commerce company founded in 1994 by Jeff Bezos and headquartered in Seattle, Washington, United States. Amazon is the tech giant expanding its businesses and focuses on e-commerce retailing, cloud computing (Amazon Web Services), digital streaming and other related services.
It started operations as an online bookseller and expanded its operations to sell electronics, video games, food, future, movies, grocery, clothing, toys and many more. Amazon is no more focus on only e-commerce but it also expand its physical (brick and mortar) presence to increase its customer base and brand presence.
Amazon e-commerce segment dominates almost 50% of the U.S e-commerce market. All this success is made possible due its huge expansion, loyal customer base and the Amazon prime membership program and lastly the competitive advantage of change and adoptability.
Amazon key strength is its strong financial position which enabled Amazon expansion decision and support other business like Amazon Web Services. AWS is a cloud computing platform that provide services to individuals, companies and governments. In the year 2018, Amazon annual revenue from AWS services reached to $25.656 billion which was only $17 billion in 2017.
Let us discuss in detail who are the strongest competitors of Amazon.
- Home Depot
- Best Buy
- Microsoft Azure
Amazon E-commerce Competitors
In the e-commerce segment Ebay is the top competitor of Amazon. eBay Inc. is an e-commerce marketplace founded in 1995 by Pierre Omidyar headquartered in San Jose, California. The company website engages both business-to-business and business-to-consumer sales. After its humble beginning, eBay turned into a household name.
It is “the online marketplace” where individuals and businesses buy and sell variety of goods. Buyers can freely use website but sellers are charged fee for their items sold after providing limited free listings. Countless transactions go through eBay website on daily basis. After Amazon, eBay is the second largest e-commerce company in the United States in sales share at 6.1%.
Walmart is one of the fastest growing ecommerce retailer in 2019. This retail giant surpassed Apple to become the third largest e-commerce retailer. Walmart e-commerce sales up 43% in Q4 of 2018 in the US market. This was made possible due to growing online grocery, delivery business and huge collection of assortments on Walmart.com. Walmart has become the strongest competitor of Amazon, Instacart and many other grocery businesses. Wal-mart.com is working with several partners to offer grocery delivery to customers door step at more affordable prices.
Home depot is an American home improvement retailer that sells tools, construction products and services. It has 2290 stores located in United Stated, Canada and Mexico and these stores are the hub of its business. In the year 2018 the company generated 108.2 billion which increased by $7.3 billion as compared last year. The Home Depot online generated 7.9% of net sales which was 6.7% of net sale in 2017. The company online sales grew 26.2% in 2018.
The analysis I gave shows that Home Depot online community presence is increased as a result it is gradually investing in website and mobile application to enhance search capabilities and overall website functionality that will increase the user experience. As compare to Amazon the Home Depot has maintained its position as home improvement retailer. No doubt Home Depot has one of the key competitor of Amazon.
Etsy also etsy.com is an online marketplace that focuses on craft and vintage items under the categories of jewelry, home decor, furniture, clothing, bags and many more. It provides a storefront to sellers where they can offer their listings for a certain fee per item.
There is no comparison of Etsy with Amazon, as it generated only $603 million revenue in the year 2018 which was 441.23 million in 2017. But my logic behind this mentioning is the survival of Etsy in this competitive business environment. Amazon launched “Amazon homemade” in October 2015 to target the artisan community. Etsy charges lower commission and provides more freedom to sellers. With all initiatives, Etsy is not only competing with “Amazon homemade” marketplace but also improving its sales figures year by year.
Best Buy Co. is an American Consumer Electronics Retail Company operates in United States, Canada and Mexico and headquartered in Richfield Minnesota.
According to forbes.com the company e-commerce sales is around 14% of the total revenue. The company is focusing on e-commerce growth to remain competitive in the Amazon dominated ecommerce marketplace. This consumer electronic company is working hard to cut costs, stabilize its revenue stream and increase its online sales. Best Buy made huge investments in the online platform and shown improvements in the online sales. The company is also looking forward to build digital capabilities that can increase customer shopping experience on digital devices.
Costco Wholesale Corporation also known as Costco is a multinational corporation founded in 1976 by James Sinegal and Jeffrey Brotaman. Costco has many success stores, in 2015 it was the second largest retailer in the world after the retail giant Walmart. Costco ecommerce sales for the last quarter surged by 25.5%. Loyalty reward programs is the key factor of online sales growth. According to Costco CFO, the company is planning to expand its ecommerce operation in Australia and Japan. Costco need to improve its digital capabilities to better compete with Amazon and other ecommerce businesses.
Flipkart is a major eCommerce platform based in Bengaluru, India. Sachin Bansal and Binny Bansal founded Flipkart in 2007. Walmart acquired Flipkart 77% stakes in 2018 for US$16 billion. Flipkart is competing with Amazon India. Both these giants in Indian e-commerce market extending in similar direction e.g. digital payments, private labels and groceries and aggressively expanding in the market.
Amazon China Competitors
Amazon China is facing fierce competition not only from Chinese e-commerce giants Alibaba.com and JD.com but small domestic companies like Pinduoduo, sunning and VIP.com are a huge threat to Amazon in the Chinese e commerce market. Amazon has less than 1% market share in China which was 15% in 2011 and 2012. According to CNN.com the U.S e commerce giant is partially retreating from Chinese e-commerce market. It will shut down its e-commerce platform in China in the coming few months. Other operations like cloud computing services and Kindle e-readers and content will be fully functional in the country. Here is a list of top eCommerce retailers in China.
Amazon Competitors in Brick and Mortar Retail Industry
Walmart Inc. is the world leading brick and mortar Retail Corporation. The company achieved the milestone of $514.4 billion revenue. The company expanded its wings and operating 11,368 stores worldwide and one of the world’s leading employer with 2.2 million employees.
Walmart is the top competitor of Amazon. Walmart is worried about Amazon.com for a decade. Walmart started its online presence to beat Amazon business strategy. After acquiring Whole Foods, Amazon has become a direct competitor of Walmart in groceries. In Indian market Walmart has acquired majority of shares in FlipKart, which is one of the leading ecommerce retailer in India and both giant retailers are competing for market share and loyal customer base.
Costco Wholesale Corporation is
another American retailer which operates membership-based warehouse clubs.
Costco is behind Amazon and trying to give a tough time to Amazon in retail
Costco offers bulk quantity of products at discounted prices to its members who pay annual membership fee.
According to Costco fiscal report 2018, Costco generated annual revenue of $141.576 billion with reported net income of $3.134 billion. Over the previous fiscal year this total revenue is 9.7% increased. The company has a worldwide presence with over 770 warehouses globally.
The Kroger Co. is a retailing company founded in 1883 by Bernard Kroger in Cincinnati, Ohio. Kroger has a huge presence in 35 states and operates more than 2700 supermarkets and multi-department stores.
Kroger became a direct competitor of Amazon after Amazon acquired Whole Foods in 2017 for $13.7 billion. Amazon offers two-hour delivery service but not able to find success in the grocery business. Walmart and Kroger have made huge investment in technology and stores and one of the key advantage they have is number of physical stores.
Kroger has not only increased number of organic food items but also charge lower prices than Whole Foods. This really affects the competition between Kroger and Amazon. Huge products assortment and lower prices allow millions of customers to shop at Kroger and Walmart instead of Whole Foods which is part of Amazon.
Target is another brick-and-mortar store and strong Amazon competitor. Like Walmart, Amazon and Costco, Target offers a huge list of products. Target Corporation is a huge presence in United Stated operating 1851 stores as of May 2019.
The merging of online and offline retailing is a key advantage to Walmart and Target as these both retailers have a large neighborhood store presence. Retailers like Walmart and Target have changed the retailing game in the industry. If Amazon wants to snatch a huge chuck from the $800 billion grocery market, it have to create a business model to its e-commerce capabilities with a physical store network. Amazon must expand its physical presence in order to fulfill its retail ambitions.
Amazon Competitors in Streaming Media
Netflix is Amazon competitor in the segment of streaming media services i.e. Amazon Prime. It is a video on demand services founded in 1997 by Reed and Marc headquartered in Los Gatos, California. The company offers a subscription based streaming services with a huge collection of tv series, feature movies and documentaries. Being one of the leading internet entertainment services having 148 million subscribers in more than 190 countries around the globe.
If we compare Netflix and amazon prime, Amazon Prime is also a subscription services that only offers streaming videos, music and reading books but the service also includes two day free delivery and several other benefits. Netflix is purely a streaming-video platform whereas Amazon Prime offers a variety of added benefits. Amazon Prime doesn’t charge extra for different video quality whereas Netflix charges for video quality and number of devices.
Other Amazon Competitors
Both Microsoft Azure and Amazon Web Services are the leading cloud computing services around the globe. Microsoft Azure is a leading cloud computing platform offered by Microsoft. Azure is responsible to build, test, deploy and manage different application with the help of Microsoft-managed data centers. Microsoft reported $30.6 billion revenue in Q3 2019 where Azure revenue grown by 73% which makes it’s one of the largest cloud computing services in the world.
Facebook is a huge social media platform and dominate the social sphere while Amazon online retail business. Amazon is trying to add social aspects while Facebook want to enter e-commerce. Facebook marketplace has a huge success in 2018. Small business owners and local sellers are using Facebook marketplace to offer goods and services. This is a direct threat to Amazon’s resale market which is moving Amazon to private labelling even more. Facebook and Amazon are marketing competitors where small business owners use Facebook sponsor ads and Amazon PPC.
FedEx is a Courier delivery services founded in 1971 by Frederick W. Smith. The company is headquartered in Memphis, Tennessee. The company has a robust delivery system known for overnight shipping services that provide customers to track package and real-time location updates. In the fiscal year 2018 FedEx delivered 8.34 million packages on daily basis. The company is operating in 220 countries and territories. Amazon has already mentioned that it will compete with FedEx and UPS which means that Amazon is trying to become a key player in the shipping and logistics industry. According to analysts Amazon Air is an important progress in this regard.