Amazon tipped to hit US$100bn in 2015

Summary:Amazon is likely to hit US$100 billion in annual revenue and is on a growth path that eclipses the world's most successful retailer, Wal-Mart.

Amazon is likely to hit US$100 billion in annual revenue and is on a growth path that eclipses the world's most successful retailer, Wal-Mart.

That revenue projection comes from Morgan Stanley analyst Scott Devitt. In a large research report that emphasised that Amazon has plenty of runway left for growth, Devitt made the following points:

  • "Amazon can fuel growth just by taking wallet share from its existing customers. Amazon's 121 million customers spend about US$275 a year. Wal-Mart's 300 million customers spend US$750 a year excluding groceries and Sam's Club.
  • International expansion continues.
  • New efforts such as Amazon Web Services and digital sales via the Kindle platform are promising.
  • Subscription e-commerce for grocery staples is another promising avenue. I've been experimenting with subscription groceries for things like tea and cereal. Overall, Amazon's pricing needs to come down a bit versus Wal-Mart — based on my informal Dignan Go Lean and Frosted Flakes cereal index — but scale should help that."

Here's the money chart via Morgan Stanley.

Amazon results

(Credit: Morgan Stanley)

Other odds and ends from analysts are upbeat about Amazon.

  • Jefferies analyst Youssef Squali reckons that Amazon sold 4 million Kindles in the fourth quarter. Amazon should move about 10 million Kindle devices in 2011.
  • Ebooks should generate US$184 million in sales for the fourth quarter, said Squali.
  • Fulfilment centre expansion at Amazon has focused on dry packaged goods and home and garden. These untapped categories can fuel growth in upcoming years, said Squali.
  • Based on Amazon's fourth quarter actual peak orders, which were up 44 per cent from a year ago, Amazon's revenue should be about US$13.05 billion, said Piper Jaffray analyst Gene Munster.

Via ZDNet US

Topics: Amazon

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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