Amazon's Market Impact

Amazon leads the online beauty market in 7 out of 10 European countries Nielsen reports that 22% of beauty sales in Western Europe (UK, France, Germany, Italy, Spain) now occur online, with e-commerce growth surpassing physical retail. The UK is leading in online adoption with beauty shoppers spending €213 annually (vs. €148 in Germany, €113 in France) and with 73% penetration among e-shoppers. Amazon is increasingly dominating the European beauty e-commerce landscape with Amazon having the highest market share in 7 out of 10 Western European markets according to Nielsen. In Italy, 42% of online beauty shoppers buy exclusively on Amazon, a key reason behind its decision to open its first European beauty store there. Two factors drive Amazon’s success in Europe: 1) Male shoppers: men account for 33% of online beauty sales, and 55% of Amazon’s beauty customers are male (vs. 36% on specialist sites). 2) A strong presence on dermo-cosmetics: Amazon’s share of CeraVe sales in France surged from 58% to 70% in 2024. The growth of Amazon in Europe is occuring to the detriment of incumbents. In France, 30% of Amazon’s 2024 beauty buyers were new customers which were coming from competition. As per Nielsen estimates, Sephora (-5 pts), Nocibé (-2.5 pts), and Marionnaud (-2.3 pts) all lost shares to Amazon in France.

🏆 This week Amazon reported another record-breaking quarter. 💡 Why I wouldn't want to own another #eCommerce company: 📈 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 & 𝗚𝗿𝗼𝘄𝘁𝗵 Amazon's sales growth accelerated to 14% Y/Y and the #eCommerce giant has booked USD 575bn in revenue in 2023. Just to remain at double-digit growth, Amazon will have to find another 60bn of revenues next year. ✏️ 𝗣𝗿𝗼𝗳𝗶𝘁𝘀 I think the bottom line is much more impressive: Amazon has improved its gross profit by 22% and its gross margin by almost 3 PP Y/Y from 42.6 to 45.5% gross margin. Compared to sales growth it kept fulfilment costs stable, spent just a bit more on R&D and froze #marketing spend while cutting General & Admin cost by 10%. This cost discipline led to a 4x better operating margin (1.8>7.8%) and 5x more operating profit (2.7 to 13.2bn). ⛈️ 𝗖𝗹𝗼𝘂𝗱 Amazon Web Services (AWS) revenue growth also accelerated from 12.3 to 13.2% Y/Y growth. However, keep in mind that Google's Cloud Platform is growing at 26% and its closest competitor Microsoft #Azure is growing at 30%, of which 6% have been added by #AI-related applications. If this trend continues, Microsoft will take the lead in the cloud market by no later than 2026. Still #AWS will contribute more than USD 30bn in profits to Amazon next year, which equals 100% of its 2023 net profits. Read: Amazon would still hardly be profitable without AWS. 📦 𝗥𝗲𝘁𝗮𝗶𝗹 & 𝗠𝗮𝗿𝗸𝗲𝘁𝗽𝗹𝗮𝗰𝗲 While Amazon's retail efforts ('Online Stores') do not achieve double-digit growth anymore, the 3rd-party marketplace business and #retailmedia #advertising business are growing by 20 and 27% respectively. Next year, Amazon will receive more cash from merchant fees and advertising than from consumers buying from Amazon. 🍿 𝗣𝗿𝗶𝗺𝗲 𝗦𝘂𝗯𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻𝘀 Although Amazon sees churn in prime subscriptions in some geographies, price increases and content products have led to continued 14% growth in Prime subscription revenues, now grossing at USD 40bn per year. 💡 𝗧𝗵𝗲 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆 Amazon has managed to bring its advertising cost down to approx. 5% of revenue again. It's noteworthy, that the company is spending only USD 44bn on marketing while receiving 47bn of advertising money from merchants in 2023. 𝗡𝗶𝗰𝗲 𝗳𝗹𝘆𝘄𝗵𝗲𝗲𝗹, you've built there. Amazon #logistics is also on track to bring fulfilment costs down to 𝗹𝗲𝘀𝘀 𝘁𝗵𝗮𝗻 𝟭𝟬% 𝗼𝗳 𝗚𝗠𝗩, which is incredibly efficient. If Amazon loses money at 10% fulfilment and 5% marketing ratio - how can any other online retailer ever get to a 10 or 15% EBITDA margin? 🚨 I'm not sure if #eCommerce is a proven business model yet, and Chinese media platforms like SHEIN, Temu and Alibaba.com add more pressure to an already distressed sector. ❓ Would you buy another eCommerce company but $AMZN right now and if yes which one can compete with this juggernaut?

My fourth trip to China left me with a renewed sense of awe and insight. Each visit brings new learnings, but this time, the changes in how Chinese sellers are approaching Amazon really stood out. Here are the key takeaways: 1️⃣ From Product Sellers to Brand Builders Chinese sellers are evolving. I now see a clear divide between “product sellers” and “brand sellers”. The old-school approach of managing based on ACOS and TACOS is giving way to a new generation of sellers who prioritize growth and ROAS (Return on Ad Spend). These brand-focused sellers are building lasting businesses, not just chasing volume. 2️⃣ AI is Leveling the Playing Field Many of the challenges Chinese sellers have historically faced are now being solved through AI tools. Sellers are using AI to refine listings, enhance images, and craft product pages that truly resonate with customers. The result? A better customer experience and more polished brand presence. 3️⃣ Temu is Still a Thing, But... Temu may be popular, but the smart Chinese brands are recognizing that cheap products don’t build profitable businesses in the long run. Many sellers are realizing that the real value lies in building quality brands, not simply flooding the market with low-cost goods. It’s a big shift, and those who are making it are now focused on premium products. I met one brand that made a dramatic shift—from low-margin electronics to selling heavy, premium outdoor furniture. Talk about a 180-degree pivot! 4️⃣ Brand Building Meets Performance Marketing It’s no longer just about ACOS—brands are finally recognizing the importance of balancing brand-building with performance marketing. The best sellers understand that long-term growth comes from a combination of brand recognition and smart, data-driven performance tactics. 5️⃣ AMC is Still Underutilized—But Not for Long I’m excited to see that AMC (Amazon Marketing Cloud) is still flying under the radar for many sellers, both in China and the U.S. But that’s about to change. With recent updates, AMC for Sponsored Ads is poised to explode in 2025. Sellers who tap into this tool will have a major advantage in expanding their reach and fine-tuning their advertising strategies. Expect to see more wins from Chinese brands leveraging AMC. 6️⃣ The Next Wave of Generative AI I got a sneak peek at what I would call the next wave of tech: generative AI and chat-based systems built from the ground up. Early tests are encouraging, with brands able to scale ad spend while maintaining solid ROAS. As these systems improve, we’ll see Chinese brands using Generative AI to gain an edge in both marketing and operations. The future is smart, and it’s here. A huge thank you to Lin (Susan) Zhai, Diana Lai, and the entire team for your incredible hospitality during this trip. Thanks also to my fellow travelers Jason Cohen, Jem McIlveen, Andrew Roth, and Yong Sohn for making this trip even more memorable.

You aren't managing your advertising correctly if you’re not tracking organic rankings. Amazon operates like a flywheel: One action perpetuates another, driving momentum faster and faster. The more sales you generate, the more reviews you gather. More reviews lead to even more sales, building a strong cycle of growth. 👉 This cycle also works for organic ranking. 👈 Sales velocity and conversion rates are two of the most significant factors influencing your organic rankings on Amazon. When a customer searches for a keyword, clicks on your ad and makes a purchase, it sends a powerful signal to Amazon’s algorithm. This action boosts your organic ranking for that specific keyword, creating a ripple effect that can lead to more visibility and sales. However, this creates a catch-22, especially if you’re just starting out on Amazon. Without organic rankings, how do you get sales? And without sales, how do you boost your organic rankings? 👉 That's the importance of strategic advertising. 👈 By driving sales through ads, you can build up your organic positioning, which in turn drives more organic sales. But you're missing out on the full picture if you’re not actively tracking your organic rankings. You won’t know if your ad strategy is truly effective. Sometimes, it’s worth breaking even—or even losing money—on a specific keyword if it pushes you to a higher organic ranking and unlocks more organic sales. Bottom line: Your advertising and organic rankings are deeply intertwined. Sellers, if you're struggling with figuring out the Amazon flywheel, shoot me a DM 📩

What's one thing that all of these companies have in common? Meta Alibaba Group UPS Comcast PepsiCo AT&T Target UPS Johnson & Johnson They recorded less revenue in 2023 than the $140 billion - with a B -- that Amazon generated just from one unsexy, behind-the-scenes part of its business: the fees it charges third-party merchants to list goods on Amazon and to store and ship them to customer doors. Crazy when you think about it like that. In recent years, Amazon has extracted a greater cut of sales from these small and midsize merchants, even as Amazon’s reliance on these sellers continues to grow. During the final three months of 2023, the proportion of total goods sold through Amazon that come from these sellers—rather than Amazon’s own inventory—crossed the 60% mark for the first time in company history. Yet at the same time, from 2017 to 2022, the cut of revenue that Amazon takes from these sellers increased from around 40% to around 50%, according to the e-commerce research firm Marketplace Pulse. Now, many longtime, level-headed sellers who I've gotten to know over my decade of covering Amazon, are fuming over a new set of fees that they say have crossed a line and will pressure them to give Amazon more control of their supply chain and potentially lead to higher customer prices. Even as the Federal Trade Commission antitrust suit against Amazon focuses in large part on the company's relationship with these small businesses. My latest for Fortune examines the latest chapter in this drama and what might happen next. Let me know what you think in the comments or in a private message! https://lnkd.in/e63hbRxh

The numbers coming out of Amazon Now deserve a second read. Fastest-growing ecommerce business unit in Amazon India's history. Orders doubling every quarter since launch. And now - a formal announcement to build India's largest delivery in minutes network across 300+ cities. This is Amazon playing a very long, very serious game. A network of micro-fulfilment centres, stocked with tens of thousands of products - groceries, appliances, fashion, beauty - all available through ultra-fast delivery in minutes. Over a million products same-day. Four million next-day. Every delivery window, covered. What makes this announcement particularly significant is one data point buried inside it. Prime members triple their shopping frequency after experiencing Amazon Now. Triple. Get customers to experience ultra-fast delivery in minutes once - and their entire relationship with ecommerce changes. More orders, more categories, more often. 50 million customers already live in this reality. 300+ cities are about to. Quarter by quarter, micro-fulfilment centre by micro-fulfilment centre - Amazon has built 1000 MFC’s! Now is becoming the backbone of how India shops.

Amazon is swallowing the ENTIRE retail value chain.. where will this stop!? 🐍 ➡️ Yesterday, Amazon launched Supply Chain by Amazon: they opened up their end-to-end suite of supply chain services to third-party sellers - across all sales channels, incl. outside Amazon Amazon's service package is pretty rad: 🏭 pick up inventory from the sellers' manufacturing facility 🛫 ship cross-border 📃 handle customs 🚚 manage ground transportation 📦 store inventory 🤖 provide automated inventory replenishment 🛵 last mile delivery Sellers will be able to outsource pretty much their entire supply chain logistics to Amazon, both for the products they sell in Amazon’s store and through other sales channels, including online + physical stores... ✅ Amazon's latest expansion will offer even more convenience to customers & businesses Users will benefit from a wide selection of products, fast shipping, and various services all in one place. While businesses can access a (growing) suite of services through Amazon - dealing with less partners than before But it's not all roses ❌ The market dominance of Amazon is becoming absurd. Is this another aggressive step to eat up the entire retail value chain? The retail giant will now disrupt multiple logistics providers (probably take over 10s of the in the process) and grow even more exponentially 🥊 Amazon's increasing power might raise concerns about antitrust issues & potential monopolistic behavior. It can stifle competition and limit choices for consumers and businesses And we're not even talking about the company's control over the already vast amounts of data (which is ever growing), that gives it an unfair advantage in the market 🤔 Amazon's expansion into the entire retail value chain brings both + and - While it offers convenience, efficiency, and market access, it also raises concerns about market dominance, data privacy, and its impact on small businesses Where will this stop? 👇 I think: "never". #trendwatching #retail #amazon #ecommerce #logistics #supplychain #commerce #business #tech #future #innovation

Have you noticed? #Amazon has changed its price algorithm in recent months. Turning itself from price follower to price leader. Amazon now: 🚩 Matches more retailers across categories 🚩 Matches bundles to the price of single SKUs 🚩 Matches promotions from most brands' DTC websites These may not look like groundbreaking changes. But with Rufus now showing price history charts, Amazon is doubling down on its best-price guarantee for consumers. For brands, the impact is significant. 𝗕𝗲𝗰𝗮𝘂𝘀𝗲 𝘆𝗼𝘂𝗿 𝗺𝗮𝗿𝗴𝗶𝗻𝘀 𝗮𝗿𝗲 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝘁𝗵𝗶𝘀 𝘀𝗵𝗶𝗳𝘁. As a result, 3P Sellers face tighter RRP constraints through Amazon's Fair Pricing Policy. While 1P Vendors are pushed for AON budgets and higher Net PPM targets in AVNs. So ask yourself: - Is launching your full assortment still the right strategy? - Should you diversify across other retailers (Walmart)? - When will you update your sales policies for the age of Amazon? - Why is distribution control not a priority for your teams? - How long until you start calling Amazon's Net PPM bluff? Yes, that means to stop looking for shortcuts and start making the hard decisions. But if you don't protect your profitability, nobody else will. --- What's your take on Amazon's pricing strategy? Let me know in the comments! #amazonvendor #amazonstrategy

𝐄𝐯𝐞𝐫𝐲 𝐬𝐚𝐥𝐞 𝐬𝐞𝐚𝐬𝐨𝐧 𝐡𝐚𝐬 𝐢𝐭𝐬 𝐰𝐢𝐧𝐧𝐞𝐫𝐬 𝐚𝐧𝐝 𝐥𝐨𝐬𝐞𝐫𝐬. 𝐒𝐡𝐨𝐩𝐩𝐞𝐫𝐬 𝐭𝐡𝐢𝐧𝐤 𝐢𝐭’𝐬 𝐭𝐡𝐞𝐦. 𝐂𝐨𝐮𝐧𝐭𝐞𝐫𝐟𝐞𝐢𝐭𝐞𝐫𝐬 𝐤𝐧𝐨𝐰 𝐢𝐭’𝐬 𝐧𝐨𝐭. Endless deals, flashing timers, carts piling high. But here's the catch: shoppers aren't the only ones gearing up. Counterfeiters are too. Every sale season, opportunistic sellers flood platforms with knockoffs that look real, feel real, but carry risks that last long after the discount ends. That sinking feeling when a "bargain" turns into a battle? It's more common than we'd like. A Which? investigation in the UK tested 34 cosmetics bought online. Two-thirds were counterfeit. On some sites, 36% failed authenticity checks; on others, including resale platforms, every single item was fake. The study may have been UK-specific, but the lesson is global: peak shopping periods create the perfect cover for counterfeit listings, and India is no exception. Counterfeit cosmetics, skincare, and health products can hide lead, arsenic, and other toxins. The consequences can include rashes, infections, burns, or lasting skin issues. Reminders that not all deals are worth the price. To their credit, platforms are responding. Brand registry programmes and takedown systems now give rights holders more tools to spot and remove infringing sellers. Amazon's version has been a game-changer for swift action. These are important steps forward, but no system is foolproof. For buyers, vigilance is still the best defence - check the seller, look for batch details and authenticity markers, and report anything suspicious. And when the wrapping comes off, the question is simple - did you score a steal, or did you just get stolen from? #ip #counterfeit

Amazon opens its logistics to Walmart, Shopify and SHEIN – quietly building the backbone of global e-commerce Amazon has expanded its Multi-Channel Fulfillment (MCF) service to support orders from Walmart, Shopify, and Shein. This marks a strategic step toward making Amazon’s logistics infrastructure available even to competing platforms. Until now, MCF supported marketplaces like Etsy, TikTok Shop, and Temu. The latest update means sellers can manage all their inventory centrally and fulfill across channels using Amazon’s network. The result: 19% fewer out-of-stock situations and 12% faster inventory turnover. From a European perspective, this signals Amazon’s ambition to become the default fulfilment layer for global commerce—regardless of where the sale happens. The update is part of a broader push: 1) Global Warehousing and Distribution will allow sellers to store goods in bulk near manufacturing hubs (China, Vietnam, India) and ship to destination markets on demand. 2) Amazon Global Logistics continues to expand with direct freight routes connecting Asia to key markets including the UK, Germany, France, Italy, and Spain. For European brands and sellers, this could reshape the fulfilment landscape: - More efficient cross-border distribution - Better stock availability for marketplaces - A stronger case for channel-agnostic inventory planning Amazon (USA) leads US e-commerce with ~38% market share. Shopify (Canada) powers over 1.7 million merchants globally. Walmart (USA) is the second-largest US marketplace. Shein (China) is one of the fastest-growing fashion platforms, with significant traction in Europe. This move is less about marketplace competition—and more about building a logistics operating system for the future of commerce. #ecommerce #retailtech #logistics #supplychain #fulfillment #fmcg #marketplaces #omnichannel #digitalcommerce #inventorymanagement #warehousing #distribution #multichannel #retailstrategy #retailinnovation #shein #shopify #walmart #amazon #d2c #crossborder #globaltrade #europeanretail #europelogistics #ukretail #germany #france #italy #spain #usamarket #asiamarkets #retailinvesting #retailmedia #startups #canada #china #usa #europe #asia #northamerica