US Retail giant Amazon is predicted to exceed US$500 billion in revenue by the end of this year, according to a report by Trackr.
The profits are projected to increase by at least 30 per cent, setting a new record as people continue to migrate online during the ongoing Covid-19 pandemic.
The projection is based on five fundamental factors – pandemic-inspired online shopping, an increasing number of new sellers joining the platform, continually improving delivery and logistics systems, new Covid-19 mutations suggesting possible extension of the pandemic, and analysis of Amazon’s revenue growth during the past 10 years.
Last year, Amazon reported a record-breaking $386 billion in revenue, and managed to increase its profits by nearly 38 per cent. Trackr expects the company to follow a similar path this year.
Trackr says Amazon is continually working on improving its delivery and logistics efficiencies. Besides partnering with logistics companies such as FedEx, UPS, and the US Postal Service, Amazon is continuing to invest in its own Amazon Air service to ensure higher efficiency of the delivery process and test new delivery methods, such as drones aimed at delivering orders in 30 minutes.
Trackr app’s co-founder Ernestas Petkevicius commented on increased online buying power due to the growing transition to online shopping.
“The shift to online is for sure unstoppable and has plenty of room to grow. Logistics is a big challenge for any retailer, and Amazon is not an exception as it will see more buying power coming online from stimulus checks and different social programs all over the world,” said Ernestas.
Amazon was able to secure its position at the forefront of e-commerce due to the worldwide lockdowns and social distancing that increased the demand for online shopping options. It now receives more than 200 million monthly visitors, with Prime memberships expected to reach 153.1 million next year (compared to 142.5 million last year).
Additionally, more than 1 million new sellers are onboarding the platform every year. According to the report, 85 per cent of Amazon sellers are profitable.
As new Covid-19 mutations signal the possibility of extended pandemic effects, people are expected to continue limiting their exposure outdoors and purchase online to keep themselves and others safe.