Data analysed by Trackr has revealed that in 2021, the American retail giant Amazon will hit its all-time high annual revenue – which will exceed $500bn – a yearly increase of at least 30%.
The projection is based on five fundamental factors, such as the pandemic-inspired online shopping trend, increasing number of new sellers onboarding Amazon, improving delivery and logistics processes, new COVID-19 mutations signalling the extended pandemic effects, and the ongoing Amazon revenue growth during the past 10 years.
Amazon reports a record-breaking 2020 revenue, further growth is projected
From the data, Amazon ended 2020 on a high note, reporting a record-breaking $386bn in revenue. The company managed to increase its profits by nearly 38% and is expected to continue following the same path in the upcoming year.
One of the reasons for this is that Amazon is continually working on improving its delivery and logistics inefficiencies that lead to better customer experience, thus strengthening the online shopping trend even more.
The Trackr app’s co-founder Ernestas Petkevicius commented on growing online buying power: “Shift to online is for sure unstoppable and has plenty of room to grow. Logistics is a big challenge for any retailer, and Amazon is not an exception as it will see more buying power coming online from stimulus checks and different social programs all over the world.”
Besides partnering with such logistics companies as FedEx, UPS, and USPS, the everything store continues building Amazon Air to ensure higher efficiency of the delivery process and testing new delivery methods, such as drones aimed at delivering orders in about 30 minutes.
Amazon was able to secure its position at the forefront of e-commerce due to the worldwide lockdowns and social distancing that increased the demand for online shopping options. It now enjoys more than 200 million monthly visitors, Prime memberships are expected to reach 153.1 million in 2022 (compared to 142.5 million in 2020), which create the perfect conditions for Amazon to thrive like never before.
Furthermore, more than a million new sellers are onboarding the platform every year, and not without a good reason. From the data, 85% of Amazon sellers are profitable, driving more than half of Amazon’s $386bn revenue in 2020.
As the new COVID-19 mutations signal the possibility of extended pandemic effects, people are expected to continue practicing social distancing and purchase online in order to keep themselves and others safe.
Amazon already exceeded its own expectations in 2020, and such consistently growing numbers alongside the already mentioned arguments for further growth indicate that the projection of this e-commerce giant crossing $500bn in revenue by the end of 2021 is more realistic rather than just optimistic.
Move into ‘Bricks & Mortar’
Following the news last month that Amazon has opened its first retail store in the UK – after its initial success in the States – could this play a factor in its increased revenues this year?