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04/06/2021

Study: Amazon could exceed $500 billion in revenue

Dan Berthiaume
Senior Editor, Technology
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During 2021, Amazon may increase its revenue by more than 20%.

According to analysis from parcel tracking platform Trackr, following a record-breaking 2020 that saw its annual revenue grow almost 38% to $386 billion,  Amazon will continue to follow the same path and exceed $500 billion in revenue by the end of 2021. 

In addition, Trackr expects the online giant to increase annual net income, which reached $21.3 billion in 2020, by at least 30% year-over-year and hit all-time highs as consumers continue to face challenges of the ongoing health crisis. This projection is based on five fundamental factors:

1. The COVID-19 outbreak and associated worldwide lockdowns have accelerated the shift to e-commerce by five years, as consumers try to adapt using modern technology. Shopping apps have seen a spike in downloads, becoming the second most popular app category after music apps.

2. Increased demand for online shopping options allowed Amazon to secure its position at the forefront of e-commerce. With more than 200 million visitors every month, continually increasing numbers of Prime memberships that are expected to reach 153.1 million in 2022, and record-breaking holiday season and Prime Day, Trackr says Amazon now has the perfect conditions to thrive like never before.

3. More than 1 million new sellers onboard Amazon Marketplace every year. Trackr cites JungleScout research which indicates 44% of Amazon Marketplace sellers said COVID-19 was a significant part of their success in 2020. Amazon now has nearly 2 million active sellers worldwide, and 319,000 new ones have joined the platform in 2021 so far.

4. Trackr’s Amazon’s revenue projection for 2021 is also based on the continuous improvement of delivery and logistics inefficiencies that lead to better customer experience. Amazon has been looking for ways to improve its own delivery services, and continues to build Amazon Air capacity to ensure higher efficiency of the delivery process.

5. To be able to offer a variety of delivery options, one of them being one-hour delivery, Amazon also works to improve its distribution systems and is testing new delivery methods – such as drones aimed at delivering orders in about 30 minutes to be able to offer even quicker delivery solutions.  

Trackr also attributes its projection to new COVID-19 mutations that signal the possibility of extended pandemic effects. As there’s no way to tell how this will affect pandemic management and what risks it holds for the future, Trackr expects consumers to continue practicing social distancing and purchasing online.

Even if the COVID-19 restrictions will begin to ease, Trackr says the pandemic has significantly impacted consumer habits that aren’t likely to change anytime soon.