In 2019, sellers on the Amazon marketplace sold $200 billion worth of products. Amazon marketplace is so large it would rank as the 50th largest economy in the world if it were its own country. Below New Zealand’s economy, but bigger than Qatar’s. The Year in Review looks at the state of marketplaces and makes predictions on what’s to come next.
Despite Amazon’s dominance in the market, it continues to get bigger. It reached three million active sellers in 2019, 10% of which were able to surpass $100,000 in yearly sales. By launching in Singapore and the United Arab Emirates, it now runs sixteen marketplaces worldwide. US-based sellers sold more than 2.1 billion items on Amazon in 2019, more than 4,000 per minute. However, it hosts many international sellers, too, most of which are from China.
Brands saw a tremulous year on Amazon, the start of 2019 marked with Amazon’s supposed decision to turn smaller brands previously selling wholesale to the company to sellers on the marketplace. Those rumors didn’t materialize as drastically as predicted, but they did make brands reconsider their strategy around Amazon. The world of brands on Amazon, however, still includes a virtually endless list of private label brands, some owned by Amazon many more by sellers, rendering product discovery on the platform a challenge.
Walmart, eBay, Google Shopping, Target, and Wish are competing with Amazon for marketplaces market share. Walmart is a clear leader because, despite eBay’s market share of online shopping is second only to Amazon, it has seized to grow. Social networks, including Instagram and YouTube, are also building marketplaces, trying to offer social commerce and different discovery from the rest of the shopping platforms.
Advertising on Amazon remains the fastest-changing aspect of Amazon, with new advertising tools by the company, as well as an industry of advertising agencies. Amazon advertising is growing beyond performance marketing in the form of sponsored products. Amazon is going after ad budgets under CMOs, looking for a more holistic advertising strategy and not just bottom-of-the-funnel ads where a click leads to a sale. Inspired by Amazon, other commerce platforms are adding advertising features too.