Has e-commerce peaked?
THREE YEARS AGO, as lockdowns forced consumers to move much of their spending online, a golden age for e-commerce appeared to be dawning. Optimistic investors, convinced that shoppers would keep buying on the internet, lifted valuations of e-merchants to frothy heights. Retailers old and new raced to expand delivery networks.
Today those heady days look like a distant memory. On August 3rd Amazon, the world’s largest online retailer, reported 11% year-on-year growth for the second quarter of the year, excluding its cloud-computing division. That was better than expected—and provoked a roughly 10% jump in the company’s share price. Yet it was a fraction of the 42% sales growth that Amazon reported for the same quarter in 2020, and slower than the giant’s pre-pandemic trend. The same day Wayfair, an online purveyor of furniture that surged amid covid-19, reported its ninth consecutive quarter of declining sales.
For now, much of the growth in online grocery shopping will be in kerbside pickup, reckons Mr Caine, with customers collecting pre-picked goodies from stores to save on delivery fees. Amazon’s $14bn acquisition of Whole Foods, a posh supermarket, in 2017 was an admission that physical stores would remain central to the grocery business for the foreseeable future. Brick-and-mortar retailers, with their vast store networks, continue to dominate the category. Walmart, the mightiest of them all, sells 17% of Americans’ groceries, according to GlobalData, a research firm. Amazon’s share is less than 2%.
2023-08-04 12:50:34
Article from www.economist.com
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