Amazon's online market share may be smaller than previously thought

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Amazon’s dominance of the U.S. e-commerce landscape may not be as significant as previous estimates suggested, according to a top research firm.

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The Seattle-based retail giant is projected to generate about 38 percent of all U.S. retail e-commerce sales in 2019, according to second-quarter estimates by eMarketer. That figure marks a significant downgrade from the firm’s first-quarter estimates that Amazon would control about 47 percent of the overall market.

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An eMarketer representative said the adjustment stemmed from data provided by Amazon CEO Jeff Bezos in his April letter to shareholders regarding third-party sellers on its platform. The data allowed eMarketer to “update a key input” in its forecast model to more accurately reflect Amazon’s position.

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“Third-party sales have grown from $0.1 billion to $160 billion – a compound annual growth rate of 52%. To provide an external benchmark, eBay’s gross merchandise sales in that period have grown at a compound rate of 20%, from $2.8 billion to $95 billion,” Bezos wrote in the letter, adding that “third-party sellers are kicking our first-party butt.”

While Amazon’s market share may be smaller than previously thought, the e-commerce giant still holds a commanding lead over rivals. EBay ranked second with a 6.1 percent share of U.S. e-commerce sales, followed by Walmart at 4.7 percent and Apple at 3.8 percent.

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Amazon generated net sales of $232.9 billion in fiscal 2018.

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