AMZN vs WMT: Amazon Sales Surpass Walmart for First Time
In the latest quarter, Amazon (AMZN) surpassed Walmart (WMT) in sales for the first time, signaling a potential shift in the retail landscape.
- AMZN posted $187.8 billion in revenue during the fourth quarter, exceeding WMT’s reported $180.5 billion.
- Despite this, Walmart, traditionally known as the world’s largest retailer, has held this title since overtaking Chevron (CVX) in 2012.
- However, Amazon’s revenue victory does not yet signal a definitive handover of the crown, as analysts predict Amazon’s full-year sales will reach $700.8 billion, slightly behind Walmart’s projected $708.7 billion for the same period.
Amazon’s Revenue Breakdown
Amazon continues to see significant growth in multiple business segments.
- Amazon’s retail business remains its top revenue driver, generating $75.6 billion in sales during the fiscal fourth quarter.
- Its third-party seller services, including commissions and fees for fulfilment and shipping, brought in $47.5 billion, a 9% increase from the previous quarter.
- AWS, Amazon’s cloud segment, posted a 19% increase in sales, totaling $28.8 billion, which accounted for approximately 17% of Amazon’s total revenue.
- Additionally, Amazon’s advertising business rose by 17% to $17.3 billion, nearing 10% of its overall sales.
Walmart Takes a Leaf from Amazon’s Book
Walmart is taking strategic steps to grow beyond its traditional retail roots, drawing inspiration from Amazon’s model.
- Walmart CEO Doug McMillon highlighted that the company is focusing on faster-growing, higher-margin businesses like membership services, its marketplace, and advertising.
- While Walmart’s advertising business and third-party marketplace remain smaller compared to Amazon’s, they are growing steadily and posting better margins than traditional retail sales.
- Walmart+, a subscription service competing with Amazon Prime, has seen double-digit growth, with membership and other income increasing by 33%.
- Walmart’s global advertising business also grew by 27%, reaching approximately $4.4 billion in revenue.
Walmart’s E-Commerce Growth
Even in the face of Amazon’s dominance in online retail, Walmart is seeing notable growth in its e-commerce segment.
- Walmart’s global e-commerce sales rose by 16%, with U.S. sales growing by 20%.
- This growth demonstrates Walmart’s ability to compete in the increasingly important online retail space, alongside its continued focus on expanding its digital and higher-margin offerings.
Through these strategies, Walmart is adapting to the changing retail environment, much like Amazon, while still maintaining its leadership in physical stores.
