These online retailers are at the top of their game — and their global revenues show it.
Online retail is no longer a trend of the future. More and more retailers are switching to eCommerce to connect to the growing number of online shoppers worldwide.There are expected to be over 2 billion global digital buyers in 2020, with 80% of Internet users in the U.S. having made at least one purchase online.
In the first quarter of 2009, U.S. retail eCommerce sales amounted to a little over $34 billion. Now, eleven years later, U.S. retail eCommerce sales in quarter one have more than quadrupled and amount to over $160 billion.Online sales alone account for 11.8% of total retail sales in the first quarter of 2020.
Claiming almost 12% of the entire retail industry means that eCommerce is a fiercely competitive market. However, a few key players dominate online retail and generate billions in annual revenue.
Here’s a look at five of the largest companies that consume some of the biggest chunks of the global eCommerce pie.
eCommerce giant eBay, based out of San Francisco, claims some of the prize for revolutionizing the online retail industry. It is a platform for both individual sellers and businesses. Anyone who has a product for sale can join and post his or her product, which can be almost anything.
The company’s innovative approach lies in its bidding process. Anyone interested in a product can bid, and the highest bidder gets the product. For every transaction, eBay gets a portion of the sale, which has helped the company more than double its revenue since its inception in 2005. They have increased their revenue from $4.5 billion in 2005 to almost $11 billion in 2020. Their earned revenue per day is $29.6 million.
For expanding its services, the company has made some online adjustments related to COVID-19 restrictions. This past year, the company introduced and made available in all markets a new feature called "Image Clean-Up,” which uses computer vision technology to create a more consistent-looking buyer experience and is more effective in Google Shopping for both Android and iOS. Since its launch, more than one third of sellers are using this new tool.
Additionally, in February 2020, the company completed the sale of StubHub to Viagogo, which netted proceeds of over $3 billion.
EBay's slogan, "Connecting Buyers and Sellers Globally," is as true today in the 21st century as it was at its origins in 1995.
Walmart, which opened as a brick and mortar in 1962, began its online presence in 2007 when it launched itsSite to Store service, enabling customers to make a purchase online and pick up merchandise in stores. Currently, it ranks only behind Amazon in U.S. eCommerce retailer market shares for 2020.
Despite only claiming 5% of the U.S. eCommerce market, Walmart is the largest brick-and-mortar retailer in the world with about 11,500 stores in 27 countries. Because of this, Walmart’s total annual revenue for 2019 was $514.405 billion, a 2.81% increase from 2018. Additionally, Walmart has eCommerce websites in 10 countries. Currently, Walmart’s eCommerce revenue accounts for only 8% of the company’s total revenue – close to $41 billion. As a company, their earned eCommerce revenue per day is $112 million.
Even though their eCommerce platform contributes less than 10% to the overall revenue, the company understands the need for growth to remain competitive in the Amazon-dominated retail marker. It is no surprise that Walmart has successfully adjusted its marketing campaign and online presence to account for COVID-19-related reforms. Contrary to the overall U.S. retail market results ending 2020 quarter 1 (down 2.9% for the 13 weeks ending May 2), Walmart experienced a solid performance, driven by grocery, essential goods, and a strong digital commerce. Walmart’s net sales increased by 10.5%, with eCommerce sales up 74%.
Walmart’s investments in eCommerce, including online grocery delivery and pickup, have helped their eCommerce sales grow by 97% — an increase attributed to more customers shopping online during the pandemic, stocking up on household supplies, and shopping for grocery items online.
Some additional recent changes Walmart has made include the following:
Launched free NextDay delivery from Walmart.com with plans to reach 75% of U.S. population by year's end
Introduced Walmart Voice Order, initially through the Google Assistant, to make basket building for online grocery orders even easier
Launched new personalized baby registry on Walmart.com
Introduced first online pet pharmacy, Walmartpetrx.com
Announced participation in the USDA's SNAP online purchasing pilot
Announced partnership with Affirm to allow customers to make purchases and pay over time at Walmart stores and online
Launched on Walmart.com exclusive celebrity-endorsed lines for items including denim, home decor, baby clothes, flowers, health and wellness
Announced partnership with KIDBOX to deliver personalized kids fashion through Walmart.com
Started in 1999 from a small apartment in Hangzhou, China, Ali Baba has become a top eCommerce company for wholesale trade. It now caters to the global market, as it has expanded its services to include Alipay, Aliexpress, and Taobao.com.
Think about the variety of businesses it is involved in: Alipay is an online payment system like PayPal, while Taobao.com is a content hub for Chinese customers who like to post and share videos or product reviews on social media. Aliexpress focuses on International shipping, particularly to Russia, Brazil, Spain, and the United States.
Even though Alibaba’s 2019 annual revenue of approximately $56 billion is one fifth the size of Amazon’s $280 billion, the company stands the best chance to rival its American counterpart with its dominant position and expertise in Chinese eCommerce. Alibaba’s earned revenue per day is $53.8 million.
Unlike Amazon, Alibaba incorporates more than 800 social media products, making it not just the Amazon of China, but the Facebook/Instagram/Twitter of the country as well. It had a gross merchandise value of over $768 billion, and that is without reporting revenue from Aliexpress.
In their vision statement, the company admits, “We do not pursue size or power; we aspire to be a good company that will last 102 years.” With its growing global market, though, AliBaba is ironically one of the biggest eCommerce giants out there.
In some ways another Chinese version of Amazon, JD.com, founded in 1998, boasts of the sheer infrastructure it has in place. It now has over 500 warehouses and 7000 delivery stations and handles all the logistics by itself, unlike Amazon which relies heavily on third-party delivery, although Amazon is thinking of its own delivery system as well.
Many of its services are similar to Amazon’s. In 2016, it introduced JD Plus, which is similar to Amazon Prime. Its subscribers have access to free shipping up to 60 times per year, free ebooks, a variety of discounts, and an opportunity to accrue loyalty points.
As the biggest competitor to AliBaba in China, JD.com is unique in their investment in innovative technologies. In 2017, the giant retailer announced it will establish 150 drone centers for its customers living in rural areas.
It also partners with international brands, like Walmart, which holds a 5% stake in JD.com. By partnering with big eCommerce companies in America, it helps them bring more consumers to its Chinese market.
JD.com has a company vision statement to “become the most trusted company in the world.”With strong logistics and global strategic partnerships, JD.com has grown its gross merchandise value rapidly.
They are well on their way to earning that trust on the global scale.
Amazon takes the prize for revolutionizing consumer behavior and how we think about retail. Founded first as a marketplace for books in 1994, the eCommerce giant now gets its hands on everything imaginable – from clothing and books to software, electronics, and even groceries. It is the largest online retailer in America. With almost 800,000 employees, it ranks second to Walmart, which has more than 2 million employees.
Amazon held 38.7% share of eCommerce sales in the U.S. in the past year, dominating its competitors, with Walmart (5.3%) and eBay (4.7%), its closest competitors.
In 2019, Amazon generated $280.5 billion in revenue,a 20% increase from 2018. Amazon’s earned revenue per day is $768.5 million.
The massive company implements a “growth at all costs” strategy, which means it’s focused on expanding as much as possible. It seems every day Amazon comes up with a new service or product that can consume our lives. Amazon Web Services (AWS) is the second most profitable business for the company after its online market. You might even be buying an Amazon brand without knowing it.
Last year, Amazon began challenging video shopping networks, such as HSN and QVC, with its own live-streamed video shopping service called Amazon Live. The service streams live video shows from both Amazon talent and brands broadcasting their own streams.
With a slogan like “Work Hard. Have Fun. Make History.” it’s no surprise to see Amazon leaving its mark near the top of most lists.