In the beginning of the pandemic, I had published a post on "How Coronavirus will expedite the Amazonification of the world" and also had put my money where my mouth was, ie invested in Amazon. The other day I was reading an article on how marketplaces faired in 2020 and here are few highlights on Amazon
- 3P Amazon marketplace added eBay's worth of sales to its GMV in 2020. 3P went from 200bn to 295bn. Overall GMV was up 42%. Marketplace share of Amazon GMV grew to 62%.
- Revenue for all business categories grew by 25%+ in Q3 demonstrating across the board strength
- Amazon's marketplace is even more concentrated than Parreto principle would suggest. Just top 852 (.05%) of the sellers contribute 10% of the GMV, and top 12% of the sellers contribute 80% of the GMV.
- 18% of US GMV came from 2015 seller cohort showing stickiness in the platform
- Investors pour 1bn into buying up small merchants on Amazon. The capital pouring is validation about the robustness of Amazon marketplace as a platform to grow businesses. Also as the 3P sellers get better capitalized, this line of business can continue to see eye popping numbers.
- Amazon launched in 3 countries this year - Netherlands - March 10, Saudi Arabia - June 17 and Sweden - Oct 28th. Using auto-translated catalogues and reviews, the cost to launching new countries seeded with sellers already serving similar countries is too small. This will only expedite Amazon's international expansion.
- Ads revenue came in at 20 bn and advertising revenue as a share of marketing expense is steadily rising. This is similar to what Chamath had previously pointed out, Amazon thinks about making every expense item a revenue bullet point.
References
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