Amazon in 20 Charts—the Rise and Rise of the E-Commerce ... · Amazon’s Share of Internet...
Transcript of Amazon in 20 Charts—the Rise and Rise of the E-Commerce ... · Amazon’s Share of Internet...
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June1,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Inthisreport,wepresentmetricsfromcompanyfilings,consumersurveysandresearchfirmstochartthecontinuedevolutionofAmazon.Ourtoptakeawaysinclude:
1) AmazonWebServicesisdrivinggrowthinAmazon’soperatingmargins.Thisbusinessdivisionyieldeda25%operatingmarginin2016,upfrom19%in2015.AndthedivisionisgrowingitsshareofAmazon’stotalrevenues.
2) Amazon’sthird-partymarketplaceisalmostcertainlyprovidingfurthersupporttomargins.HalfofallunitsalesmadethroughAmazonarenowmadebythird-partysellers.
3) AmazonPrimeisshoringuptoplinegrowth.Some42%ofUSadultsnowhaveaPrimemembership,andthatfigurerisesto55%amongmillennials.
Deep Dive: Amazon in 20 Charts—
the Rise and Rise of the E-Commerce Giant
Deborah Weinswig
Managing Director
Fung Global Retail & Technology
US: 917.655.6790
HK: 852.6119.1779
CN: 86.186.1420.3016
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June1,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
TableofContents
Introduction............................................................................................3
CompanyMetrics....................................................................................4
TheAmazonCustomer...........................................................................8
Logistics................................................................................................12
NewMarkets........................................................................................13
KeyTakeaways......................................................................................14
FurtherReadingfromFungGlobalRetail&Technology......................14
AmazonShopperIntelligenceService..................................................15TableofFigures
Figure1.US:AmazonEstimatedGrossMerchandiseVolume(USDBil.)4
Figure2.Global:AmazonTotalRevenues(LeftAxis,USDBil.)andOperatingMargin(RightAxis,%)............................................................4
Figure3.AmazonOperatingMargin,bySegment(LeftAxis,%),andAmazonWebServicesRevenueasShareofTotalRevenue(RightAxis,%)............................................................................................................5
Figure4.Global:AmazonThird-PartyUnitSalesasShareofTotalUnitSales(%)andOrdersFulfilledbyAmazon(FBA)asShareofTotalThird-PartyUnitSales(%).................................................................................5
Figure5.US:RankingofLargestRetailers..............................................6
Figure6.Amazon’sShareofInternetRetailSales,byRegion(%)..........6
Figure7.AmazonRevenueGrowth,byCountry,ExcludingCurrencyEffects(YoY%Change)...........................................................................7
Figure8.EstimatedAnnualSpendingatAmazonperAdult(USDatFixed2016ExchangeRates)...................................................................7
Figure9.USConsumerSurvey:ProportionofSurveyRespondentsWhoHaveanAmazonPrimeMembership,byAgeGroup(%).......................8
Figure10.USConsumerSurvey:ProportionofSurveyRespondentsWhoHaveanAmazonPrimeMembership,byHouseholdIncome(%)..8
Figure11.USConsumerSurvey:RetailersPurchasedfrominthePreceding90Days(%)............................................................................9
Figure12.USConsumerSurvey:ProportionofConsumersWhoShoppedatAmazoninthePreceding90Days,byAgeGroup(%).........9
Figure13.USConsumerSurvey:ProportionofConsumersWhoShoppedatAmazoninthePreceding90Days,byHouseholdIncome(%).........................................................................................................10
Figure14.USConsumerSurvey:ProportionofConsumersWhoBoughtItemsinSelectedCategoriesfromAmazoninthePreceding90Days(LeftAxis,%)andAmazon’sRankingAmongUSRetailersforEachCategory(RightAxis).............................................................................10
Figure15.USConsumerSurvey:ProportionofConsumersWhoBoughtWomenswearfromAmazoninthePast90Days(%)...........................11
Figure16.USConsumerSurvey:ProportionofConsumersWhoBoughtMenswearfromAmazoninthePast90Days(%).................................11
Figure17.AmazonFulfillmentandDataCenters:TotalSpace(Mil.Sq.Ft.).........................................................................................................12
Figure18.US:NumberofAmazonFulfillmentCenters,byState.........12
Figure19.AmazonAustralia:EstimatedTotalMerchandiseSales(LeftAxis,AUDBil.exSalesTax)andEstimatedShareofTotalInternetSales(RightAxis,%).......................................................................................13
Figure20.AmazonIndia:NumberofFulfillmentCenters....................13
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
IntroductionFewretailersaretalkedaboutasmuchasAmazon—andnotjustbycommentatorsandanalysts,butalsobyshoppersandjournalists.AtFungGlobalRetail&Technology,wecoverthiscompanyfrequentlyandindepth.
Forthisreport,wehaveminedcompanyfilings,researchdatabases,consumersurveysandpressreports,andwehaveincludedourowncalculationsandestimatesinordertopresent20chartsthatwehopewilldeepenreaders’understandingofAmazon.
Thethemesdiscussedhererangefromforecastsalesandmarginsthrough2022,toaverageper-capitaspendonAmazonbycountry,toAmazon’spopularityinthewomenswearandmenswearcategories.Therearethreesignificantthemesthatweexplore:
• ThestrengtheningofcompanyoperatingmarginsfromthecontributionofAmazonWebServices.
• Thegrowingshareoftotalsalesmadebythird-partysellersonAmazon,whichcanbepresumedtoyieldhighermarginsforAmazonthandirectretailing.
• ThegrowthinAmazonPrimeandthefactthatalmosthalfofUSconsumersnowsaytheyhaveaPrimemembership.
Weprovidelinkstofurtherrelevantreportsfromourglobalteamofanalystsattheendofthisreport.
Source:amazon.com
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
CompanyMetrics
Figure1.US:AmazonEstimatedGrossMerchandiseVolume(USDBil.)
Third-party salesare thosemadeby sellersonAmazon; first-party salesare thosemadebyAmazonitself.Source:EuromonitorInternational
Webeginwiththebasics:howmuchAmazonsellsinitscoremarketoftheUS.ChartedabovearetheestimatedvaluesofgoodssoldonAmazonintheUS.Amazonsold$98billionworthofgoodsintheUSin2016,accordingtoEuromonitorInternationalestimates.Only$35billionofthoseretailsalesweremadebyAmazonitself,with$63billionmadebythird-partysellersonAmazon’splatforms.
Amazondeclaredtotalworldwiderevenuesof$136billionin2016,andsome$90billionofthatcamefromtheUS.ButtheserevenuestellonlypartofthestorybecausesomanyofthesalestransactedonAmazonaremadebythird-partysellers,forwhichAmazonbooksonlycommission.Moreover,Amazon’sstatedrevenuesincludeitsAmazonWebServicescloud-computingbusiness.
Figure2.Global:AmazonTotalRevenues(LeftAxis,USDBil.)andOperatingMargin(RightAxis,%)
Actualdatathrough2016;consensusestimatesfor2017–2022asofMay15,2017Source:S&PCapitalIQ
Amazongrewtotalworldwiderevenuesby27%in2016.TheconsensusamonganalystsisthatAmazonwillgrowtotalworldwiderevenuesby22%in2017.Consensuscallsforrevenuestogrowatacompoundannualgrowthrate(CAGR)of16.5%thereafterthrough2022,whichwouldbringrevenuesto$356billion.
Theconsensusexpectationisthatoperatingprofitgrowthwillunderpacerevenuegrowththisyear,leadingtoaslightfallbackinmargins.However,after2017,analystsexpectstrongandconsistentoperatingprofitgrowththatwouldtakemarginstoover10%by2022.
Asweshowinthenextchart,thegrowthofAmazonWebServicesisbolsteringmargins.
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Figure3.AmazonOperatingMargin,bySegment(LeftAxis,%),andAmazonWebServicesRevenueasShareofTotalRevenue(RightAxis,%)
Source:S&PCapitalIQ/FungGlobalRetail&Technology
Amazon’snewlycementedprofitabilityisbeingdrivenbyAmazonWebServices,whoseoperatingmarginsfarexceedthoseoftheremainderofAmazon’sbusiness(i.e.,thesaleofproducts).In2016,AmazonWebServicesgenerateda25%operatingmargin,thoughthatwasdilutedatthegrouplevelbecauseAmazonWebServicescontributedjust9%oftotalrevenue.Thesegmentisexpectedtocontinuegrowingitsshareoftotalrevenue,soitscontributiontogroupmarginswillalsocontinuetogrow.
LossesinAmazon’sinternationalsegmenthavedeepened,andthecompany’splannedmoveintoAustraliaandinvestmentsinIndiamaketheprospectsofashifttoprofitabilityinthatsegmentremoteinthenearterm.
Figure4.Global:AmazonThird-PartyUnitSalesasShareofTotalUnitSales(%)andOrdersFulfilledbyAmazon(FBA)asShareofTotalThird-PartyUnitSales(%)
UnitsrefertophysicalanddigitalunitssoldonAmazonsitesworldwide.FBAshareofthird-partyunitsalesisdisclosedonlyinthefourthquarterofeachyearandisapproximate(e.g.,itwas“morethan55%”in4Q16).Source:Companyreports
Amazon’sprofitabilityisalmostcertainlybeingsupportedalsobythegreatershareofsalesaccountedforbythird-partysellers—althoughAmazondoesnotbreakoutprofitsbyfirst-partyandthird-partysales.Forthird-partysales,Amazontakesacommission,typicallyaround15%ofthesellingprice,inexchangeforlittlemorethanadvertisingtheproductonitssite.
Moreover,amajorityofthird-partysalesarenowfulfilledbyAmazon,whichmeansthatAmazonstoresanddispatchesinventoryonbehalfofthosesellers,therebygeneratingfurtherincrementalfeesforitself.
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Figure5.US:RankingofLargestRetailers
Source:EuromonitorInternational/FungGlobalRetail&Technology
AmazonwasAmerica’sfourth-largestretailer,onlineoroffline,lastyear.Ithassteadilyclimbedthemarketsharerankings,thoughitstayedatnumberfourbetween2015and2016.
In2016,Amazon’stotalestimatedUSsaleswere$98billion,comparedwithtotalrevenuesof$115billionatKroger,$177.5billionatCVSand$308billionatWalmartUS(excludingSam’sClub).
AccordingtoEuromonitor,Amazoncaptured3.4%ofallUSretailsalesin2016.
Figure6.Amazon’sShareofInternetRetailSales,byRegion(%)
Includessalesbythird-partysellersonAmazon.AustralasiaisthesumofAustraliaandNewZealand.Source:EuromonitorInternational
Amazonenjoyeda33%shareofUSInternetretailsalesin2016,includingsalesmadebythird-partysellers.
Inmarketswheretherehasbeenaconsiderableappetiteforonlineshopping—notablytheUSandGermany—Amazon’sshareofonlinesaleshasgrownconsiderably.Thedrivetogetmorethird-partysellersontoAmazon’splatformhashelpedunderpingrowthinthesemarkets.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Figure7.AmazonRevenueGrowth,byCountry,ExcludingCurrencyEffects(YoY%Change)
Source:S&PCapitalIQ/FungGlobalRetail&Technology
TheUScontributedtwo-thirdsofallAmazonrevenuein2016,andthecountryhasbeenthecompany’sfastest-growingstatedregionalsegment.USrevenueswereup28%yearoveryearin2016.
Germanycontributed10%ofAmazonrevenuelastyear,andrevenueinthecountrygrewby20%.TheUKcontributed7%ofrevenue,andrevenueinthecountrygrewatasimilarratetoGermany.
JapanandtheRestoftheWorldsegmenteachcontributed8%ofrevenuein2016.(Totalsdonotsumto100%duetorounding.)
Therevenuegrowthratesaboveareshownintherespectivenationalcurrenciesinordertostripoutcurrencyeffects.
Figure8.EstimatedAnnualSpendingatAmazonperAdult(USDatFixed2016ExchangeRates)
BasedontotalsalesmadethroughAmazon’srespectivenationalwebsites,includingsalesbythird-partysellers.Calculatedbasedonpopulationdataforthose18+.Source:EuromonitorInternational/USCensusBureau/Eurostat/FungGlobalRetail&Technology
Basedonestimatedtotalsales,includingsalesbythird-partysellers,wecalculatethateachUSadultspentanaverageofjustover$412onAmazonin2016.SpendingbyUKadultswasnotfarbehind.
Thespendingdataaboveareshownintermsoffixed2016exchangeratesinordertostripoutcurrencyeffects.
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TheAmazonCustomerInthissection,weshowcaseUSconsumersurveydatafromourresearchpartnerProsperInsights&Analytics.
Figure9.USConsumerSurvey:ProportionofSurveyRespondentsWhoHaveanAmazonPrimeMembership,byAgeGroup(%)
SurveysconductedMarch2013toApril2017Base:Between4,912and7,609adultsages18+ineachthree-monthperiodSource:ProsperInsights&Analytics
PrimehasbeenadrivingforceinAmazon’sgrowth.USpenetrationratesofPrimemorethandoubled,to42%,inthefouryearsendedApril2017.Millennials(thosebornbetween1983and1998,byProsper’sdefinition)aremorelikelythanthoseinolderagegroupstohaveaPrimemembership.
Thedatachartedaboveshowtheproportionofsurveyrespondentswhoansweredyeswhenasked,“DoyouhaveanAmazonPrimemembership?”Thewordingissignificant,becauselargerproportionsthanthosechartedarelikelytohaveaccesstoPrimedeliverybenefitsthroughaPrimemembershipheldbysomeoneelseintheirhousehold.
Figure10.USConsumerSurvey:ProportionofSurveyRespondentsWhoHaveanAmazonPrimeMembership,byHouseholdIncome(%)
SurveysconductedMarch2013toApril2017Base:Between4,912and7,609adultsages18+ineachthree-monthperiodSource:ProsperInsights&Analytics
IntheUS,more-affluenthouseholdsaremorelikelytohavePrimememberships.Asthegraphaboveshows,growthofPrimemembershipamongthosewithincomesinthe$35,000–$74,999rangetracksgrowthamongtypicalPrimecustomersveryclosely.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Figure11.USConsumerSurvey:RetailersPurchasedfrominthePreceding90Days(%)
Base:7,008(2016)and7,406(2017)adultsaged18+Source:ProsperInsights&Analytics
Measuredbyshoppernumbers,AmazonisthemostpopularretailerintheUS—evenifitisnotyetnumberonebymarketshare.AnApril2017ProspersurveyofUSadultconsumersfoundthatalmost70%ofthosepolledhadpurchasedfromAmazonintheprevious90-dayperiod.ThiswasaroundfivepercentagepointshigherthantheshareofthatsaidtheyhadpurchasedfromWalmartoverthesameperiod.
Figure12.USConsumerSurvey:ProportionofConsumersWhoShoppedatAmazoninthePreceding90Days,byAgeGroup(%)
SurveysconductedApril1,2013,throughApril1,2017Base:Between4,912and7,733USadultsaged18+ineachperiodSource:ProsperInsights&Analytics
Amazonseesseasonalfluctuationsinshopperparticipationlevels,withastrongpeakovertheholidayperiod.Inthegraphabove,wechartthemedium-termtrendwithalineartrendline,whichshowsasteadyincrease.
TheProspersurveydatarevealtwotrends:
• MillennialshavefirmlyovertakenGenXersasthemostlikelyagegrouptoshopatAmazon.Fully78%ofmillennialshadpurchasedfromAmazoninthe90daysendedApril1,2017.
• Thegapbetweentheagegroupshastendedtowiden.Thisiscountertowhatwewouldcommonlyexpect:wewouldexpecttoseethatgapnarrowasolderagegroupsadopte-commerceandcatchupwithyoungeragegroups.ThissuggeststhatAmazoniscementingitsappealamongyoungeragegroups.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Figure13.USConsumerSurvey:ProportionofConsumersWhoShoppedatAmazoninthePreceding90Days,byHouseholdIncome(%)
SurveysconductedApril1,2013,throughApril1,2017Base:Between4,912and7,733USadultsaged18+ineachperiodSource:ProsperInsights&Analytics
Byhouseholdincome,thetrendisconsistent:more-affluentshoppersaremorelikelythantheaverageshoppertoshopatAmazonandless-affluentshoppersarelesslikelyto.
Shopperswhohaveincomesinthe$35,000–$74,999rangetrackthetypicalcustomerverycloselyintermsoftendencytoshopatAmazon,astheydoforPrimemembership(chartedearlier).
Figure14.USConsumerSurvey:ProportionofConsumersWhoBoughtItemsinSelectedCategoriesfromAmazoninthePreceding90Days(LeftAxis,%)andAmazon’sRankingAmongUSRetailersforEachCategory(RightAxis)
SurveysconductedJune2016throughApril2017Base:Between6,791and7,609USadultsaged18+ineachsurveyRankindicatesAmazon’spositionversusotherretailersnamedinthesurveybynumberofshoppers—so,a#1rankingshowsthatAmazonisthetopretailerforthatcategory,asmeasuredbynumberofshoppers.Source:ProsperInsights&Analytics
ThechartaboveshowsboththeproportionofconsumerssurveyedwhohadpurchasedaniteminoneoftheselectedcategoriesfromAmazoninthepreceding90daysandAmazon’srankinginthatcategoryversusotherretailers,basedonshoppernumbers.
Infiveofthesevencategoriesshown,Amazonisnowthenumberoneretailerbynumberofshoppers:onlymenswearandgroceriesseeotherretailerstakingthetopspot.ThelatestmenswearsurveyisfromJune2016,sowecouldseeAmazoncapturethefirstpositioninthatcategorywhenProspercompletesitsJune2017survey.
Shoppernumbersareimpactedbythefrequencyatwhichconsumersbuyitemsindifferentcategories.Electronics,forexample,tendtobepurchasedmorefrequentlythanapparel.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Figure15.USConsumerSurvey:ProportionofConsumersWhoBoughtWomenswearfromAmazoninthePast90Days(%)
Base:4,912–7,406adultsaged18+ineachsurveyperiodSource:ProsperInsights&Analytics
Morethanone-thirdofallUSmillennialssurveyedhadboughtwomenswearfromAmazoninthe90daysendedApril2017,comparedwith21%ofallUSconsumerssurveyed.
AmazonisnowthenumberonedestinationforwomenswearintheUS,basedonshoppernumbers:itnarrowlyovertookKohl’sasthetopretailerforwomenswear,byshoppernumbers,intheApril2017Prospersurvey.
However,thisdoesnotmeanthatAmazonisthebiggestretailerinthecategorybysales,asthatmetricisaffectedbyfrequencyofshoppingandaveragespendaswellasbynumberofshoppers.
Figure16.USConsumerSurvey:ProportionofConsumersWhoBoughtMenswearfromAmazoninthePast90Days(%)
Base:5,606–8,760adultsaged18+ineachsurveyperiodSource:ProsperInsights&Analytics
Prosper’slatestsurveyregardingmenswearisfromJune2016,whenAmazonwasthesecond-most-shoppedretailerintheprevious90-dayperiodamongthosesurveyed.OnlyWalmartwasmorepopularformenswear.WemayfindthatAmazonhasmoveduptobecomethemost-shoppedretailerformenswearintheJune2017survey.
Aswithwomenswear,Amazon’stotalshoppernumbersconcealmuchhighershoppingratesamongmillennials.
• FormoreonAmazonandapparel,seeourreportDeepDive:RetailRevolution—USApparelShiftsin20Charts.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Logistics
Figure17.AmazonFulfillmentandDataCenters:TotalSpace(Mil.Sq.Ft.)
Spaceisfor“fulfillment,datacentersandother.”Source:Companyreports
Attheendof2016,Amazonoperated160millionsquarefeetofspaceacrossitsfulfillmentcentersanddatacentersworldwide.Some62%ofthisspacewasintheUS,whichaccountedfor66%of2016revenues.
RecentlyopenedUSfulfillmentcentersaretypicallybetween750,000and1millionsquarefeetandemployaround1,000peopleeach.
AccordingtopropertyresearchfirmMWPVLInternational,Amazonoperatesseveraltypesofdistributioncenters:largefulfillmentcenters,midsizeAmazonPantryandAmazonFreshdistributioncenters,midsizeregionalsortationcenters,smallerdeliverystations(forsortingpackagesforshoppersinnearbyareas)andevensmallerPrimeNowhubs(whichstockpopularproductsforrapiddelivery).
Figure18.US:NumberofAmazonFulfillmentCenters,byState
Includesfulfillmentanddistributioncenters,regionalsortationcenters,AmazonPantryandAmazonFreshdistributioncenters,deliverystationsandPrimeNowhubs,operationalorplanned,asofJanuary2017Source:MWPVLInternational/Statista
Amazonoperated214distributionfacilitiesacrosstheUSasofJanuary2017,accordingtoMWPVLandStatista.CaliforniaandTexasarehometothehighestnumberoffulfillmentcenters.
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DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
NewMarkets
Figure19.AmazonAustralia:EstimatedTotalMerchandiseSales(LeftAxis,AUDBil.exSalesTax)andEstimatedShareofTotalInternetSales(RightAxis,%)
Source:FungGlobalRetail&Technology
InApril2017,AmazonconfirmedthatitissettolaunchafullofferinginAustralia—althoughitdidnotdisclosealaunchdate.Assumingitmovesintothemarketin2018,weestimatethatAmazonAustraliacouldgeneratetotalnetmerchandisesalesofapproximatelyA$4billionin2021andA$10billionin2026(equivalenttoUS$3billionandUS$7.5billion,respectively,atthetimeofwriting).Ourfiguresincludesalesbythird-partymarketplacesellersonAmazon,sotheydonotrepresentrevenuesbookeddirectlybyAmazon.
Theseestimatestranslatetoashareofapproximately12.5%ofAustralianInternetsalesin2021and20%in2026,climbingbyanaverageof150basispointsperyear.
• SeealsoourreportDeepDive:Aussies,GetReadyforAmazon!
Figure20.AmazonIndia:NumberofFulfillmentCenters
Source:Companyreports
IndiaisasecondfocusforinvestmentbyAmazonand,above,wechartthegrowthinitsnumberoffulfillmentcentersinthecountry,basedonpressreports.Inadditiontofulfillmentcenters,AmazonIndiaalsooperatesdeliverystations,whichsortdeliveriesforshoppersinnearbyareas.
InApril2017,AmazonIndiaannouncedthatithadopenedsevennewfulfillmentcentersthatwillbeusedexclusivelyforlargeappliancesandfurniture.InMay,thecompanyannouncedthatitwouldopenafurthersevenIndianfulfillmentcentersbytheendofJune,bringingthetotalto41.
Amazon.inoperatespurelyasamarketplacesite,duetorestrictionsonforeigndirectinvestmentinmultibrandretailing(i.e.,thesellingofarangeofthird-partybrands).InAmazon’sfirst-quarter2017results,CEOJeffBezossaid,“Amazon.inisthemostvisitedandthefastest-growingmarketplaceinIndia.”AmazonIndialaunchedPrimeinJuly2016.
• SeealsoourreportDeepDive:IndiaRisingPart2—E-CommerceDisruptorsinIndia.
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12.514.4
16.117.6
18.9 20.0
0.0
5.0
10.0
15.0
20.0
25.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2021E 2022E 2023E 2024E 2025E 2026E
Sales OnlineShare
2
20 2124
34
41
Jul14 Sep15 Jun16 Sep16 Apr17 Jun17E
14
June1,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
KeyTakeawaysAschartedearlier,analystscurrentlyexpectAmazontogrowworldwiderevenuesby161%,from$136billionin2016to$356billionin2022.Theconsensusamonganalystsisforoperatingmarginstostrengthensteadily,beforereachingdoubledigitsin2022.
Thekeydatapointsfromthisreportthatshowcasethebuildingblocksforthisforecastgrowthare:
1. AmazonWebServicesisbolsteringprofitgrowth.Thisbusinessdivisionyieldeda25%operatingmarginin2016,upfrom19%in2015.AndthedivisionisgrowingitsshareofAmazon’stotalrevenues:AmazonWebServicesaccountedfor9%oftotalrevenuesin2016,upfrom7.4%in2015.
2. Amazon’sthird-partymarketplaceisalmostcertainlyprovidingfurthersupporttomargins(thoughthecompanydoesnotbreakthissegmentout).HalfofallunitsalesmadethroughAmazonarenowmadebythird-partysellers,forwhichAmazonbooksacommissionwithouttakingownershipofinventory.
3. AmazonPrimeisshoringuptoplinegrowth.Some42%ofUSadultsnowhaveaPrimemembershipandthatfigurerisesto55%amongmillennials.Giventhatdeliverybenefitscanbesharedwithinahousehold,asubstantiallyhighershareoftheUSpopulationhasaccesstoPrime.
FurtherReadingfromFungGlobalRetail&TechnologyDeepDive:Aussies,GetReadyforAmazon!
DeepDive:IndiaRisingPart2—E-CommerceDisruptorsinIndia
DeepDive:USConsumerSurvey—AmazonPrimeMembersLoveShoppingOffline,Too
DeepDive:USConsumerSurvey—AmazonYettoCracktheMenswearMarket
DeepDive—USConsumerSurvey:AmazonIsWinningtheBattleintheToySegment
USHealthandBeautyAidsConsumerSurvey:AmazonIsNotOnlyCompetitiveinPrice,butAlsoinCustomerSatisfaction
FootwearPoisedtoGrowat4TimestheRateofApparelThrough2020:DataRevealSpecialtyandOnlineAreBenefiting,withAmazonGainingtheMost
DeepDive:RetailRevolution—USApparelShiftsin20Charts
15
June1,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
AmazonShopperIntelligenceServiceThisreportfeaturesselecteddatathatareavailablefromtheAmazonShopperIntelligenceService.ThisservicecombinesFungGlobalRetail&TechnologyanalysisandcommentarywithinputonthousandsofUSshoppersfromProsperInsights&Analytics.Itincludes:
• Over10yearsofsurveydataonAmazonshoppersandleadingretailers’shoppers.
• ProsperShopperPreferenceShare(whichindicateshowAmazonisgrowingasapreferredretailerfor11differentmerchandisecategories,andthereasonswhy).
• Retailpositioningmaps(whichplotretailersandtheircompetitorsbasedonthepercentageoftheirshopperswhoshopthereforparticularreasons).
• Netpromoterscores.
• Keydemographics.
Source:FungGlobalRetail&Technology
16
June1,2017
DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJohnMercerSeniorAnalyst
HongKong:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406London:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017FungGlobalRetailTech.com