Providing in-depth insight, data, and analysis of everything digital.BI Intelligence

Source: AP

Amazon and the New Age of DeliveryTHE EVERYTHING SHIPPER

AMAZON IS INVESTING HEAVILY INTO SHIPPING

FIRST, WHAT IS AMAZON?

Source: Getty

STILL THE FASTEST-GROWING MAJOR RETAILER

Source: Amazon

Amazon Net Sales

$0

$40

$80

$120

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Billion

s

AMAZON IS US E-COMMERCE

Source: Wall Street analysts

Amazon’s Share Of US E-Commerce Market

0%

10%

20%

30%

40%

2008 2009 2010 2011 2012 2013 2014 2015

AND E-COMMERCE IS WHERE ALL THE GROWTH IS

Source: US Census, comScore, BI Intelligence

Forecast: US E-Commerce Sales

BUT E-COMMERCE OPERATIONS ARE EXPENSIVE

Source: Deloitte

What US Consumers Consider “Fast Shipping” (2015)

0% 20% 40% 60% 80%

100%

Same-day Nextday Within2days

Within3-4days

Within5-7days

Within1-2weeks

FastShipping NotFastShipping

AND AMAZON IS NOT IMMUNE TO THOSE COSTS

Source: Amazon

Amazon Shipping Costs

$0

$5

$10

$15

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Billion

s

AMAZON’S DOUBLE-EDGED SWORD

Source: Amazon

Amazon Shipping Costs

$0

$40

$80

$120

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

BillionsAmazon Net Sales

$0

$4

$8

$12

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Billions

SO AMAZON HAD TO OFFSET THOSE COSTS

Source: Amazon

Amazon Shipping Costs And Shipping Revenue

$0

$5

$10

$15

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Millions

ShippingCosts ShippingRevenue

AND IT DID THIS IN TWO WAYS

#1: AMAZON PRIME

020406080100

déc-11

mars-12

juin-12

sept-12

déc-12

mars-13

juin-13

sept-13

déc-13

mars-14

juin-14

sept-14

déc-14

mars-15

juin-15

sept-15

déc-15

Millions

Source: Piper Jaffray, Morningstar, RBC, CIRP, BI Intelligence

Amazon Prime Members Worldwide

FREE SHIPPING DRIVES PRIME SIGN-UPS

Source: RBC Capital Markets

Primary Reason US Amazon Prime Members Signed Up For Prime

#2: FULFILLMENT BY AMAZON

Source: Amazon

THIRD-PARTY SELLERS CORE TO AMAZON

Source: RW Baird

Percentage Of Amazon Orders, By Seller

83% 79% 81% 86% 87% 89% 90%

0%

50%

100%

Overall PetSupplies

MusicalInstruments

Automotive HomeSupplies

Appliances Patio,Lawn

Amazonasseller Third-partyseller

BRANDS FEEL STRONG-ARMED BY AMAZON

Source: Wall Street analysts

Amazon’s Share Of US E-Commerce Market

0%

10%

20%

30%

40%

2008 2009 2010 2011 2012 2013 2014 2015

AMAZON’S COSTS NOW UNDER CONTROL

Source: Amazon

Amazon: Growth Of Shipping Costs vs. Growth Of Shipping Revenue

0%

20%

40%

60%

2008 2009 2010 2011 2012 2013 2014 2015

CostGrowth RevenueGrowth

BUT AMAZON WON’T STOP THERE

Source: Amazon

Amazon Shipping Costs And Shipping Revenue

$0

$5

$10

$15

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Millions

ShippingCosts ShippingRevenue

ENTER: DRAGON BOAT

Code Name For Amazon’s Own Global Shipping Service

CROSS-BORDER SHIPPING BY AIR AND SEA

AMAZON NOW HAS FREIGHT AIRCRAFT

Number Of Freight Aircraft Planes In Operation, By Carrier

20

240

370

0

100

200

300

400

Amazon UPS FedEx

March2016

Source: Company filings, BI Intelligence

DRAGON BOAT IS PART OF A LARGER INITIATIVE

AMAZON DELIVERY DRONES

Source: Amazon

Source: US Census, comScore, BI Intelligence

Delivery Fee That Consumers Pay For A Small Package5lb package delivered within 10 miles in the US

BRINGING A NEW ERA OF FAST, CHEAP SHIPPING

AMAZON LOCKERS

Source: Wikipedia Commons

AMAZON IN-STORE PICKUP

Source: Getty

IN-STORE PICKUP GROWING POPULAR

Source: Slice Intelligence

Percentage Of E-Commerce Sales That Are In-Store Pickup, By Retailer (2015)

AMAZON ISN’T THE ONLY RETAILER SHIPPING PARTNERS SHOULD BE CONCERNED ABOUT …

ALIBABA IS FOLLOWING A SIMILAR TRAJECTION

Source: Alibaba

ALIBABA GMV

Source: iResearch

Alibaba Global Gross Merchandise Volume

$0

$50

$100

$150

0% 20% 40% 60%

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

$Billions

ALIBABA’S SHARE OF CHINA E-COMMERCE

Source: iResearch

Share of China B2C E-Commerce Market

61,4%

Others Jumei

Yixun Amazon

Dangdang Yihaodian

Gome Vip

Suning JD

Tmall

CHINA E-COMMERCE MARKET STRUCTURE

Source: iResearch

China E-Commerce Sales, By Type Of Marketplace

25,3% 34,6% 40,4% 45,8% 51,4% 56,1% 59,6%

0%

50%

100%

2011 2012 2013 2014 2015 2016 2017

B2C C2C

IN THE END, DELIVERY VOLUME WILL KEEP INCREASING

Year-Over-Year Increase In Holiday Package Shipments, By Carrier (2015)

Source: UPS, FedEx

LEADING TO DELAYS AROUND PEAK SHOPPING

AND RETAILERS WILL PICKUP THE SLACK …

SO, FRIENDS OR FOES?

PoweredbyBusinessInsiderandtrustedbythousandsofbusinessprofessionals,BIIntelligenceoffersessentialinsightandanalysisondisruptivetechnologies,helpingtodrivesuccessfuldecisionmaking.

OurCoverageAreas:

ü InternetofThings

ü Fintech &Payments

ü E-Commerce

ü DigitalMedia

ü Mobile,Apps&Platforms

WhatWeDeliver:

ü Over100ExtensiveResearchReports

ü AtLeast1NewReport/Week

ü 6InsightfulDailyNewsletters

ü ActionableCharts&Data

ü OnlineResearchCenter

LearnmoreaboutBIIntelligencetoday:http://read.bi/learn-more

"Ihavefoundatleastonegreatpieceofnew,usefulinformationintheBIIntelligencenewsletterseverysingleday.Theyarequickandto-the-point. BIIiscomingoutwithnewandinsightfulinformationeverysingleday.”

PeterSedlarcik,EVP- BusinessInsights&Intelligence,Havas Media

"BIIntelligenceisoneofthemainresourcesIuseonadailybasistostayaheadoftheever-changingdigitalmediacurve.TheBIIresearchteampublishesgreatchartsandreportsinatimelymanner.Ifindabout4or5reportstobeusefuleverymonth."

FrancisChe,HeadOfInsightsStrategy&Research– APAC,Yahoo

”BIIresearchhasnoagenda– it’sanobjectivesourceofmarketintel.Plus,BIIanalyzesinfofrommultiplesources.Asasmallercompany,that’ssupervaluabletous."

DeeDeeWalsh,VPofMarketing&BusinessDevelopment,Mobilize.net

"Darwinnoted'Itisnotthestrongestofspeciesthatsurvivesnorthemostintelligent,butthosemostresponsivetochange.’ConsiderBIIntelligenceacriticaltooltonotjusttosurvivebutthrive.Youmustreaditdaily,subscribetomultiplelists,reviewthereports.ItisoneofthefewresourcethatIrelyontopreparemeforchangeandthefuture.”

MichaelBecker,ManagingPartner,mCordis

LearnmoreaboutBIIntelligencesubscriptionoptionsat:

http://read.bi/learn-more