Amazon.com Inc. (NASDAQ:AMZN), Wal-Mart Stores Inc. (NYSE:WMT) And Struggle For Dominance

Posted by admin December 9, 2013 0 Comment 2417 views


Amazon.com, Inc. (NASDAQ:AMZN)’s stock has surged more than 54% year to date and this certainly compares to some 17% gains reported by the stock of retail giant Wal-Mart Stores, Inc. (NYSE:WMT).

Comparing the Market Cap

For most of the past 10 years, Wal-Mart Stores, Inc. (NYSE:WMT)’s market cap has been in a range of $175 billion and $250 billion. Whereas Amazon.com, Inc. (NASDAQ:AMZN) has successfully grown its share over past few years from market cap of less than $50 billion in 2009 to more than $175 billion in December 2013. While Amazon’s market cap compares to two-thirds of Wal-Mart’s market cap; the online retail giant is way behind when it comes to revenue and profit.

While Amazon.com, Inc. (NASDAQ:AMZN) reported revenues of $61 billion last year and its profit is expected to remain somewhere between $1 billion to $1.5 billion; Wal-Mart Stores, Inc. (NYSE:WMT)’s revenues were $469 billion last year with net income somewhere between $15 billion and $17 billion. Extrapolating this scenario while assuming double-digit revenue growth rate, it might take some 15 to 20 years for Amazon.com, Inc. to reach the current size of Wal-Mart Stores, Inc. (NYSE:WMT).

Rising Stars of East

Goldman Sachs predicts that global e-commerce sales will climb 19.4% to approximately $963 billion with most of growth coming from Asia, worth $323.1 billion. Among the three major regions on the world map contributing the most to e-commerce sales, Asia is expected to pour in the strongest growth of 27.5% followed by Europe and the U.S. contributing some 13.2% and 12.4%, respectively.

Amidst Asia, China is heading to become the world’s largest online shopping haven, predicts consulting firm Bain & Co. The company predicted in its August report that China’s e-commerce revenues could surpass that of the U.S. in 2013. Among China’s largest e-commerce platforms, Taobao Marketplace and Tmall; Tmall is believed to take-on Amazon.com, Inc. (NASDAQ:AMZN) to become the world’s largest internet retailer by 2015, predicts Euromonitor.



Write Your Comment