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EconomyOnline & Digital

Amazon will account for 5% of global retail, say analysts

Analysts have said they expect Amazon to account for 5% of the global retail market in the near future. The online retailer currently has a market capitalisation of 1.5% however it is nearing a $1bn valuation.

Amazon’s importance in the global retail market has led to the Office for National Statistics (ONS) factoring in online sales when calculating its national inflation rate.

Financial services company, Wedbush Securities, analyst Michael Pachter said: “Amazon’s gross margins have been growing by about 200 basis points a year for the last four years and it looks like it is tracking ahead of that this year.

“You are getting acceleration in gross profit dollars. The fact is that the company is having trouble spending all that profit. Those profit dollars are growing by $20bn a year.

“Most of that is coming from fulfillment and web services growth and those continue to grow at 30-40% growth rates. I do not see those letting up anytime soon. The company is, in my estimation, at about 1.5% market capitalization and I believe it could go up to 5%.”

Amazon is currently looking for a second US headquarters to accommodate growing business demands.

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