According to reports in The Information, eMarketer has lowered its 2019 estimate for Amazon’s share of U.S. online sales to 37.7 percent from its previous estimate of 47 percent. That new figure, according to eMarketer, was derived from “new guidance” from data in Amazon CEO Jeff Bezos’ annual shareholder letter.
In the April letter Amazon for the first time officially confirmed the percentage total gross merchandise sales in 2018 that came via third-party sellers — 58 percent.
According to eMarketer analyst Cindy Liu, eMarketer’s earlier estimates for third-party sales through Amazon were too high, and with hard data released by Amazon they were able to make a more accurate prediction. An eMarketer spokesperson further confirmed with Bloomberg that the company based its updated forecast entirely on the disclosure in Bezos’s shareholder letter, and not from any additional or exclusive information from Amazon.
The downward revision of Amazon’s market share comes as the eCommerce giant finds itself, along with Facebook and Google, in the cross-hairs of regulators who believe they’ve grown too large, too powerful and very much in need of antitrust oversight. There have also been recent moves among lawmakers to divide up antitrust oversight of the companies, which observers take as a sign that inquiries and regulatory processes are soon to follow.
As a result, Amazon has spent much of the last several months frequently commenting in public that the majority of America’s retail spending takes place in retail stores, and that Amazon’s total share of U.S. retail sales is only 4 percent.
“Amazon’s retail business competes in the worldwide market for retail sales,” the Amazon spokesperson said. “Our competitors include all the other online and brick-and-mortar stores that people shop at every day.”
Bezos, in that same letter, highlights the fact that many of Amazon’s retail sales come care of its third-party sellers, and also made a point to rather colorfully express what that means, regarding Amazon as a retail competitor.
“Third-party sellers are kicking our first-party butt. Badly,” he wrote.
There is a proud tradition among firms facing antitrust pressures to talk down their market share, or release data that might persuade analysts to do it for them. Microsoft, when it was facing antitrust action in the late 90’s, frequently argued its share of the worldwide market for all PC software was around 4 percent.
Amazon has its own favored “4” percent figure to point to — and, of course, the optics would be much better, especially now, if analysts touted a market share of slightly more than one third, as opposed to nearly half of the eCommerce market. Which makes one wonder — has everyone been wrong about Amazon’s market share all this time, or are data crumbs being dropped to force analysts to recalculate their market share projections?
And that, as it turns out, is really a matter of how one does the math. eMarketer has done its math.
And we’re doing ours here at PYMNTS.
We’ll share more about our market share calculations and where we come in very soon.