Amazon (AMZN) competes head-to-head for market share with some of the largest corporations in the world. Competition might be the company's greatest operational risk factor. While Amazon started out as an online retailer of books, it has grown over the decades to become the largest e-commerce company by revenue in the United States.
In its quarterly and annual financial statements, Amazon breaks down where it receives its revenue into five major categories:
- Online stores
- Physical stores
- Third-party seller services
- Subscription services
- Amazon Web Services (AWS)
Below, we'll describe each of these revenue streams and list which companies are Amazon's biggest rivals per category.
Key Takeaways
- Amazon is the world's largest online retailer and is rapidly growing its footprint in other areas such as physical retail stores, subscription services, and web services.
- Amazon's retail store rivals include Target, Walmart, Best Buy, and Costco.
- For subscription services, Amazon competes with Netflix, Apple, and Google.
- In the web services category, Amazon has several rivals such as Oracle, Microsoft, and IBM.
Online Stores
This category includes product and digital media sales from Amazon's e-commerce website. The company offers its customers a wide selection of durable and consumer goods along with digital-format products, such as e-books, videos, software, music, and games.
Amazon's competition in this segment includes LightInTheBox Holding Co. (LITB), Overstock.com (OSTK), Vipshop Holdings Ltd. (VIPS), JD.com (JD), Wayfair Inc. (W), and Etsy (ETSY).
Physical Stores
Although sales from online purchases represent the bulk of the company's revenue, Amazon greatly expanded its presence in the physical retail space with its 2017 acquisition of grocery retailer Whole Foods Market. Amazon also operates four other types of physical stores: Amazon Books, Amazon 4-star, Amazon Go, and Amazon Pop Up.
In the physical stores category, Amazon competes with Best Buy (BBY), Costco (COST), Target (TGT), Walmart Inc. (WMT), and Big Lots (BIG).
2,000+
The number of U.S. cities and towns where Amazon Prime members have access to two-hour grocery delivery via Amazon Fresh and Whole Foods Market (as of July 2021).
Third-Party Seller Services
Third-party vendors sell their products using Amazon's online marketplace platform. Amazon's popularity as an e-commerce site enables many third-party sellers to reach a wider customer base and grow their businesses. For this service, Amazon charges commission fees, shipping fees, and related fulfillment costs.
In the third-party marketplace business, founder Jeff Bezos has stated Amazon's main competitor is auction site eBay.
Subscription Services
Amazon sells a variety of subscription services. Its most popular paid subscription service is Amazon Prime, which has 200 million members around the world as of 2020. The company also sells subscriptions for e-books, audiobooks, digital video, and digital music.
Amazon's main competitors in the subscription services sector are media game-changer Netflix (NFLX), Apple (AAPL) with iTunes, and Google (GOOG) with its Play Store.
Amazon Web Services (AWS)
Amazon Web Services (AWS) is the company's cloud platform, offering over 200 services such as machine learning, artificial intelligence, storage, and analytics. AWS customers include startups, enterprises, and government agencies.
Amazon's main competitors in the web services sector are Alibaba Group (BABA), Oracle (ORCL), Microsoft (MSFT), International Business Machines Corporation (IBM), and Google (GOOG).
The Bottom Line
Amazon is a well-diversified company that benefits from several profitable revenue streams. The company specializes in disruptive innovation and can afford to fund forays into new industries in order to take market share away from its competitors. Amazon ended the third quarter of 2022 with sales up 15% to $127.1 billion from $110.8 billion in the third quarter of 2021.
The company reached a market capitalization of $1 trillion for the first time ever in September 2018. Amazon ended the year 2022 with a market cap of approximately $857 billion, down nearly 50% from the $1.70 trillion it hit at the end of 2021.
FAQs
Amazon's retail store rivals include Target, Walmart, Best Buy, and Costco. For subscription services, Amazon competes with Netflix, Apple, and Google. In the web services category, Amazon has several rivals such as Oracle, Microsoft, and IBM.
Who are Amazon's AMZN main competitors investopedia com? ›
Amazon is an online retailer, streaming services provider, and cloud computing company. Its rivals include Walmart, eBay, Microsoft, and Google parent Alphabet. Amazon earned $33.4 billion in net income on net sales of $469.8 billion in fiscal year (FY) 2021.
Who is going to compete with Amazon? ›
Top 10 Amazon competitors
- Walmart.
- Alibaba Group.
- eBay.
- Target.
- Etsy.
- BestBuy.
- Rakuten.
- Otto.
Tesla and SpaceX CEO Elon Musk and Amazon and Blue Origin founder Jeff Bezos have been rivals for 20 years. They've sparred over their space ambitions, traded barbs, and swapped places as the world's richest person.
What separates Amazon from its competitors? ›
In comparison to other websites, Amazon offers a more user-friendly experience to its clients. Major differentiators include improved search and query capabilities, suggestions based on prior purchases, one-click ordering at check-out, numerous user reviews and ratings, and dash buttons for automatic re-buying.
Who are Amazon's AMZN main competitors? ›
Amazon's retail store rivals include Target, Walmart, Best Buy, and Costco. For subscription services, Amazon competes with Netflix, Apple, and Google. In the web services category, Amazon has several rivals such as Oracle, Microsoft, and IBM.
Who are Amazon's competitors and market share? ›
Market share of leading retail e-commerce companies in the United States in 2023
| Characteristic | Share of retail e-commerce sales |
|---|
| Amazon | 37.6% |
| Walmart | 6.4% |
| Apple | 3.6% |
| eBay | 3% |
6 more rowsMay 22, 2024
In 1997, Barnes & Noble's new website seemed like it would give Amazon a run for its money. In late 1997, things weren't looking great for Amazon. Barnes & Noble had just launched its own website to compete with Amazon -- which started operating for the general public only two years before.
What is Amazon's competitive advantage? ›
Amazon is known for offering free shipping and convenience, but it also provides a vast selection of products at competitive prices. No hassle returns, an easy checkout experience, and a huge repository of reviews also help make Amazon a go-to option for a growing number of consumers.
Is there another company similar to Amazon in the USA? ›
Amazon competitors in the USA
Another significant competitor is eBay, known for its auction-style marketplace and wide range of products, including collectibles and unique items not commonly found elsewhere.
Alibaba, with its dominance in China, is Amazon's chief competitor on the global stage.
Who replaced Jeff Bezos at Amazon? ›
Amazon CEO Andy Jassy took over the role after founder Jeff Bezos stepped down.
Why is Target a competitor of Amazon? ›
Target's Physical Stores Strategy
Target relies on its physical store network to compete in the Shipping Wars as an underdog. Target uses its stores as fulfillment centers for online orders. This reduces shipping costs and competes with Amazon's quick delivery.
What is the new Amazon competitor? ›
Shein, TikTok and e-commerce company Temu, all of which have Chinese roots and close ties to sellers in Asia where many products sold on Amazon originate, are investing heavily in U.S. online shopping. TikTok launched a shopping tool on its app last year, and Shein has become America's largest fast-fashion seller.
How is Google a competitor to Amazon? ›
Google is the dominant search engine, a service that is monetized through its Google Ads business (formerly AdWords). Amazon is the dominant e-commerce retailer. However, both internet behemoths focus on selling goods and services, and this puts them squarely at odds.
How does Amazon stay ahead of competitors? ›
By staying focused on innovation to benefit customers, we enhance customer experiences—not only in our stores—but across the industry as we chart the way for other retailers to adopt similar innovations.
Who is the biggest consumer of Amazon? ›
USA: The Largest and Most Competitive Marketplace
It currently accounts for about 68.8% of Amazon's revenue and records almost three billion website visitors every month.
Who are Amazon Go store competitors? ›
Amazon Go is a chain of convenience stores in the United States that is owned and operated by Amazon. Competitors in the market for self-service brick-and-mortar shops include not just Alibaba Tao Cafe but also Grabango, AiFi, Standard Cognition, Lotte, Albert Heijn, and Zippin.
 Main Competitors? (2024))
