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.
(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