A new study by ResearchFarm, a research boutique focused on strategic insight, has predicted that online giant Amazon is to overtake the world's second-largest retailer Carrefour in sales within the next 10 years.
According to the report, entitled 'An Insider View: Amazon.com', Amazon is on track to generate more than US$40bn in sales this year with a 50 per cent growth rate, which, if maintained, could see it catch the French retailer's sales total of €101bn (2010) within a decade.
The forecast allows for Amazon's 'exceptional growth' to slow down, but, ResearchFarm said, rests on the assumption that recent investments will pay off for the group.
With Carrefour's first half growth coming in at a relatively slow 2.7 per cent, impacted by challenging economic conditions, the group contrasted this with Amazon's recent growth of 50 per cent, from an already high base.
'Amazon can grow much faster than most bricks and mortar players, because the pureplay does not have to invest into a costly store estate in foreign markets and the widening of marketplace allows for (virtually) stocking inventory without upfront investment,' said Daniel Lucht, research director at ResearchFarm.
While the forecast depends on a number of different factors, such as currency exchange rates and inflation, it also reflects on a 'certain weakness' on the part of Carrefour, the researcher noted.
It did point to further growth for the French group, but nowhere near as dynamic as Amazon's, ResearchFarm said, while it will also be competing with the online giant for web sales in emerging markets in the future.
'Leaving its ooshop and carrefour.fr operations aside, arguably, Carrefour's reaction to the online revolution, the tie up with Pixmania, which significantly also includes a marketplace option, comes very late,' Lucht added. 'Once the Carrefour/Pixmania operation is up and running in 2012, Amazon will have added significantly more scale already, making it hard for Carrefour to compete.
'Should the French retailer want to defend its current position over the next decade, the most likely option will be to buy growth through an acquisition.'
No comments yet