It seems inevitable to recapitulate the outcomes of last year, in order to better understand the forthcoming trends.
- The sales, both retail and wholesale, got higher
- The competition got fiercer
- The markets got broader
Well, who’s riding this wave of e-commerce boom? The two biggies of the industry being Walmart and Amazon. Let us look at some of the intricacies of both the business houses.
Walmart – the first Walmart store was opened in 1962 in Arkansas by a former soldier and shrewd businessman called Sam Walton. His Walmart discount city store had gained a lot of popularity with it’s diversified range of products and services. Sam, by all accounts, was a noble recipient of the American Dream. At the time of Sam’s death in 1992, there were 1960 Walmart stores. He left a will of 100 billion dollars for his family.
Before Amazon spread its wings and got into cloud computing, delivery drones, virtual assistants, it was a fairly simple ecommerce outfit. In 1994, founder Jeff Bezos created Cadabra.ink and later renamed it as Amazon.com. It went online in 1995. It sold books initially. In a few months, Amazon was making 20,000 dollars a week and will soon declare itself as the world’s largest bookstore. The company’s sale just kept expanding and reinventing itself.
Walmart is the largest private employer of the United States. Talking of numbers, Walmart has 2.3 million employers with 11, 695 stores in 28 countries and a net worth of 255 billion dollars. Amazon services are available all over the world, whether you are buying a new laptop or watching something on Amazon prime. Most of its 541, 900 employees work in the United States but it also employs people in 17 countries. Its net worth was 680 billion dollars. According to market watch, Amazon’s net worth is not only so high because of it being the Walmart of the web but also because of its Amazon web services which is leading the fight for dominance of the cloud. This is not just about selling space and services but also about understanding big data and working what the customer will buy. Walmart doesn’t have that kind of power. Walmart knows that it needs to enter the e-commerce market but it is way behind Amazon at the moment. Walmart has started to consider customer data far more seriously than it did earlier but still Amazon wins this race, hands down. Another blow to Walmart is that Amazon acquired the supermarket chain Whole foods for 13.7 billion dollar. This resulted in Amazon slashing the prices of whole foods groceries and similar items to a great extent but many critics still believe that it is no position to go head to head in a price war with the king of discount stores.
Walmart’s revenue stands at 500 billion dollars and Amazon’s revenue at 180 billion dollars. Walmart is a discount retailing company. It operates retail stores, warehouses, clubs and websites walmart.com and samsclub.com. It is world’s largest retailer and employer. Over the decades, Walmart has consistently outperformed other retailers and able to generate consistent profits and pay increasing dividends. Amazon market cap involves Amazon.com, amazon.co.uk, amazon.de, Amazon.in and Amazon.co.jp. It rapidly diversified into a host of other product categories. It maintains inventory and sells product through its online store end. It also provides platform to third party retailers while charging a small commission. Additionally Amazon offers a subscription based model through its prime service. Finally, it provides cloud infrastructure to Enterprise customers through its web services. According to Morgan Stanley, India’s massive online retail market could be 200 billion dollars. The big question remains, can Amazon build up a massive chain of physical stores? And can it compete with Walmart prices or can Walmart compete with Amazon on tech savvy online stores? Does it have a view to the future in which automation and drones will surely play a part? We can say that Walmart is definitely trying. With its acquisitions of digital commerce outfits like jet.com, shoebuy, modcloth, moose jaw and most recently, Flipkart in India.
One thing is for sure that both companies are fast becoming very similar offering offline and online shopping at bargained prices. They want to be and sell everything, becoming unstoppable business cards that own the consumer goods world. As a buyer, this battle only means things will get cheaper but it may also mean that we end up buying a lot more than we need and that’s not always a good thing. The New York Times writes about the current battle saying that this battle between these two companies has been a boom of consumerism but also has more worrying implications for jobs, wages and inequality.
The two Giants of the ecommerce arena have it all sorted out for the upcoming battles or the battle of being the supreme leader of the e-commerce industry. Amazon and Walmart are definitely putting it out there. They are leaving no stone unturned in order to excel. Although, both have different ideologies regarding multiple scenarios, they are successfully managing their position up top.