Ecommerce Needs Competition

eMarketer outlined where they believe the 2019 e-commerce market share will fall by end of year. The major gainer is expected to be Walmart with a growth of nearly 33% to $27.81 billion or 4.6% share (earlier today they announced a year over year growth of 40%). Even with that impressive number, there is no comparison to Amazon who is projected to grow 20% to $282.52 billion or an astounding 47.0% share. EBay meanwhile is number 2 with 6.1% market share but not truly growing. 

Just look at the cliff in this bar chart to highlight the top 10 by market share. This continues each year and the gap only grows as the overall market grows faster and Amazon maintains its’ considerable lead.

Retail Online Sales Share (2019 via eMarketer)

I believe it is in the best interest of the e-commerce market to have at least two majors facing head to head followed by a long tail. That would at minium make this ecommerce race an oligopoly which not ideal but would be an improvement. With the current magnitude of separation continuing year over year and growing, I  have become convinced the market needs a massive consolidation of market share to see a true competition and overall market health.

Given the list of retailers, there are a couple of options for tie-ups:

  1. Walmart buying eBay - Extends their marketplace model with no further inventory needs. 

  2. Walmart buying Quarate (QVC, HSN, Zulily) - TV platform extension along with stable of brands to extend into stores and digital channels.

  3. Walmart buying Wayfair - Fast growing home goods retailer with growing stable of sellers and advertising revenue.

Beyond the three tie-ups above, no other scenarios provide a meaningful increase in market share or are unlikely. Apple wouldn’t tie up with other retailers and I can’t imagine Costco growing outside their warehouse comfort zone. What say you?

Note: An eBay or Walmart could potentially acquire a platform provider like Farfetch or Shopify to roll up the market share of several brands but the general idea here would be roll up individual .coms or a handful of .coms.