Where will Amazon be in 10 years?

The company could grow enormously and still have a long runway ahead.
The post Where will Amazon be in 10 years? appeared first on Motley Fool Australia. –

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon.com, Inc (NASDAQ: AMZN) is the ultimate growth stock. That’s not just because it has a ton of room to grow in the huge retail and cloud computing markets, but also because it’s constantly working to invent big new businesses from scratch. No other company continuously surprises investors with unexpected value creation from new ventures. So where could Amazon be in 10 years?

Retail and cloud businesses  

It’s no secret that Amazon’s e-commerce business is a juggernaut, and it’s only been getting stronger because of the acceleration of e-commerce adoption due to COVID-19. There just aren’t a lot of compelling reasons to frequent physical retail stores in a post-COVID world when you can order online from your couch, usually at lower prices, and receive your order in a day or two. That’s especially true when Amazon offers such a great customer value proposition.

But what’s less appreciated is Amazon’s still tiny market share of the global retail market. The global retail market is a massive $25 trillion market. Over the last 12 months, Amazon’s e-commerce business had $202 billion of net sales, which is only about a 0.8% share of the retail market. So as much of a juggernaut as Amazon’s retail business is, it’s still a tiny – but rapidly growing – fish in a huge pond.

The same is true with public cloud leader Amazon Web Services (AWS), which also has a tiny market share of a huge market. AWS boss Andy Jassey said late last year that AWS was addressing the $3.7 trillion global enterprise IT market. If that’s the case, then AWS’s $40 billion of net sales over the last 12 months is only 1.1% of the opportunity.

Known and unknown emerging ventures

The most underappreciated aspect of Amazon is the company’s constant work to build additional big new businesses from scratch. The third-party marketplace and AWS were one-time development stage ideas that have grown into wildly successful businesses.

One newer initiative is Amazon’s interest in physical retail, specifically technology-enabled grocery stores. The company started out with the Amazon GO convenience stores with “just walk out” technology, where customers scan their phones on the way in, grab items off the shelves, and then just walk out. Amazon’s slew of cameras and sensors can tell what the customer left with, and informs the company what to charge the customer’s Amazon account.

This year, Amazon has parlayed that technology into Amazon GO Grocery stores, a full-size grocery store version with the same concept. And it’s recently launched a different grocery store concept altogether called Fresh, which uses the Amazon Dash Cart and Alexa-based technology to improve the grocery store shopping experience.

Amazon has a huge interest in the grocery segment because grocery stores are a massive $682 billion category in the US alone. That’s why the company is developing at least two different concepts in order to learn and optimise its approach. Given Amazon’s track record, it won’t be surprising if Amazon eventually captures a sizable share of the category. 

Amazon is also perfecting its drone delivery capabilities, and recently got approval from the Federal Aviation Administration (FAA) to begin testing its drone delivery program. In the future, this should help Amazon deliver packages to more rural customers more efficiently by saving on last-mile delivery costs. 

In addition, the company’s rapidly growing advertising business has quickly become the No. 3 online advertiser in the U.S. after Alphabet subsidiary Google and 脸书. Amazon also acquired autonomous car technology company Zoox earlier this year, which could minimise transportation and fulfillment costs in the long term.

These are just a few of the newer initiatives, and there are almost certainly more that we don’t know about yet.

Much bigger and more profitable in 10 years

Amazon should be much bigger and more profitable just from the continued growth of the retail and AWS businesses. But it has so many additional irons in the fire that it should have surprising growth coming out of nowhere in the years ahead.

Not all of Amazon’s pioneering efforts work. Online auctions, the Fire phone, online travel, and high-end jewellery are a few examples of the company’s failures. But failures help the company learn, make adjustments, and change course. For example, the online auctions failure led to the development of the third-party marketplace, which now represents the majority of retail units sold.

Over the next decade, Amazon should grow enormously and could grow to 2% or 3% of global retail sales, 3% of the global enterprise IT opportunity, 25% of the online advertising market, and 5% of the U.S. grocery market. And it would still have a huge runway ahead.

Considering its still low market shares of these big categories, investors should consider the Amazon of 2030 to be just getting started.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Andrew Tseng owns shares of Amazon and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where will Amazon be in 10 years? appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.


移动APP平台,拥有 12 个市场的 50,000 多种全球上市证券(全球市值超过 70%),直接在您的 Android 或 iOS 设备上即可操作。

与独有的交易理念和投资分析工具相结合,帮助您在我们 12 个全球市场中的几乎所有金融工具上找到可操作的见解,从而帮助您优化交易策略。





Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!