JPMorgan analysts expect Amazon to become the largest U.S. retailer by 2022

By: Ajay Pal Singh
Ajay Pal Singh
Ajay worked at Tata Motors in project planning before discovering his passion for stocks. Today, he lives in Canada and enjoys… read more.
on Jun 11, 2021
  • Amazon is set to surpass Walmart to become the largest U.S. retailer in 2022.
  • Amazon’s gross merchandise value in 2020 increased by 41% year over year to reach $316 billion.
  • Amazon is estimated to have grown its share of the U.S. e-commerce market from 24% in 2014 to 39% in 2020.

According to a CNBC news story, JPMorgan Chase & Co. (NYSE: JPM) has released a research report on Friday that predicts Amazon.com Inc. (NASDAQ: AMZN) is to overtake Walmart Inc. (NYSE: WMT) and become the largest U.S. retailer in 2022 based on gross merchandise value (GMV) — a key industry metric that measures the total value of goods sold by a retailer over a certain time period. 

Shares of Walmart are up 0.5% in the afternoon trading. The stock is down around 4% year-to-date. Shares of Amazon are down 0.3% so far today from the closing price yesterday but up more than 4% year-to-date.

Amazon could soon surpass Walmart

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Amazon’s GMV is growing at a much faster rate than that of Walmart, according to the JPMorgan analysts. Amazon’s GMV in 2020 increased by 41% year over year to reach $316 billion while Walmart’s GMV is estimated to have grown by 10% year over year to reach $439 billion in 2020.

“Based on current estimates, we believe Amazon could surpass Walmart to become the largest U.S. retailer in 2022,” analysts wrote in the report.

Pandemic accelerated the growth of online retail

The report described Amazon as “the fastest growing at scale” and estimates Amazon’s GMV has grown “significantly faster” than both U.S. adjusted retail sales and U.S. e-commerce. Amazon is estimated to have grown its share of the U.S. e-commerce market from 24% in 2014 to 39% in 2020.

The pandemic accelerated a shift towards digital driving the online sales as physical stores remained shut due to lockdowns. The shift helped Amazon solidify its dominant position as the leading online retailer in the U.S.

The company had 200 million Prime members according to Jeff Bezos’s last shareholder newsletter.

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