Bullish analyst predicts Amazon will account for 5% of global retail

Bullish analysts predict Amazon will hit 5% of global retail

Amazon’s growth to global retail dominance shows no signs of slowing with some analysts now calculating that the online behemoth could account for 5% of global retail as it nears a $1tn valuation.

The business currently has a market capitalization of 1.5%.

Speaking to Bloomberg Wedbush Securities analyst Michael Pachter said: “Amazon’s gross margins have been growing by about 200 basis points a year for the last four years and it looks like it is tracking ahead of that this year.

“You are getting acceleration in gross profit dollars. The fact is that the company is having trouble spending all that profit. Those profit dollars are growing by $20bn a year.

“Most of that is coming from fulfillment and web services growth and those continue to grow at 30-40% growth rates. I do not see those letting up anytime soon. The company is, in my estimation, at about 1.5% market capitalization and I believe it could go up to 5%.”

Amazon is currently in process of selecting a city to host its second US HQ to accommodate the growing business. In the UK, its market dominance is such that Britain's Office for National Statistics now factors in online sales to calculate a more accurate inflation rate.

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