
What's Amazon's market share? 35% or 5%? - mooreds
https://www.ben-evans.com/benedictevans/2019/12/amazons-market-share19
======
MisterPea
I think most people recognize and understand that amazon neither has a
relevant market share nor a monopoly in the traditional sense of the word. The
author makes a good point that it is very much political as much economic.

The latter is important because the traditional understanding of a monopoly is
somewhat antiquated with tech and has led to many people arguing to change its
definition.

The most prominent example is Lina Kahn's wildy successful/read paper in the
Yale Law Journal about amazon's antitrust paradox and how a company can
operate in monopolistic ways without having a significant market share.

[https://www.yalelawjournal.org/note/amazons-antitrust-
parado...](https://www.yalelawjournal.org/note/amazons-antitrust-paradox)

A similar case is Apple and Spotify competing to grow their music streaming
service.

It will be interesting to see how the current political framework is adjusted
for this new economy dominated by big tech.

~~~
nabla9
The modern view is the traditional view in the back to normal sense.

In the US Robert Bork's book "The Antitrust Paradox" started a period of time
where the antitrust law was only about benefits to consumers and overall
efficiency. The traditional and the modern viewpoint is that the role of
antitrust laws plays role in controlling economic power in the public
interests. Vertical agreements and price discrimination can be prohibited.

~~~
NeedMoreTea
I've been reading The Economist's Hour by Binyamin Applebaum[1], which
presents the dramatic changes of antitrust interpretation in some depth.
Recommended read btw.

Bork credited Aaron Director, one of the first generation of the Chicago
School and Friedman's brother in law, as his main influence. So making the
consumer and efficiency the focus can be considered an early casualty of the
wave of neoliberal deregulation we've been living with for decades.

Of course what is not considered is impact on workers, innovation, political
power, market etc. Essentially it's hollowed out to benefit large business.

[1] [https://www.economist.com/books-and-arts/2019/08/31/when-
eco...](https://www.economist.com/books-and-arts/2019/08/31/when-economists-
ruled-the-world)

~~~
mooreds
You might enjoy this podcast interview with Applebaum:

[https://www.econtalk.org/binyamin-appelbaum-on-the-
economist...](https://www.econtalk.org/binyamin-appelbaum-on-the-economists-
hour/)

~~~
NeedMoreTea
Thanks for that, a marvellous listen!

Really refreshing to hear two knowledgeable people who disagree on so many of
the conclusions having such an engaging and positive conversation. Then find
shared common ground so easily with both good at staying on point. Nice to
hear he had a high opinion of the book too -- outside those conclusions drawn.

I'd have quite liked them to keep going... :)

------
bransonf
Just looking at the numbers in the title, I assumed this article was going to
be about AWS.

The numbers are roughly 35% of commercial cloud market share and something
like 5% of all websites. (The actual numbers are 1-3% less)

But in light of the discussion here, I only see this as a good thing.

Amazon puts heavy pressure on the competition in the cloud market (and
retail). Competitors like Microsoft and Google very quickly develop their own
services to match those of Amazon, serverless being a great example. Or, take
Walmart and Target’s foray into internet retail.

Amazon is a very interesting company. They constantly bring about new
innovations and the market validates them often. And, competitors adapt to
match their offerings.

I see Amazon as a company with quite a lot of growth potential left, but
that’s not to say it will remain in the position it’s in. Just observing cloud
market share, Microsoft is heating up, and taking a lot of those customers. As
a consumer of both these products, cloud and internet retail, I respect what
Amazon is doing. Even though I’m not a Prime member and only really buy books
on Amazon, I constantly see their impact in pressuring other markets, and I
benefit as a consumer.

~~~
mxscho
> 5% of all websites (The actual numbers are 1-3% less)

Source?

It's not even clear whether this means

\- 5% of servers running

\- 5% of registered domains

\- 5% of user traffic

~~~
bransonf
Sorry, that was poorly presented on my part. I believe the most recent
estimate was around 2-3% of all internet traffic was served on a web server
being hosted by Amazon.

I can’t find the original source, but this Quora post[0] and included primary
source[1] suggest the same.

[0] [https://www.quora.com/What-is-the-estimated-percent-of-
inter...](https://www.quora.com/What-is-the-estimated-percent-of-internet-
traffic-that-is-served-by-AWS)

[1] [https://www.netcraft.com/internet-data-mining/million-
busies...](https://www.netcraft.com/internet-data-mining/million-busiest-
websites/)

~~~
latch
I'd be curious what type of insight they're getting from markets such as
China, India, Russia, South America and SEA. I couldn't find much on their
site. Their estimate could still be relevant for their target market, while
being completely off globally.

Also, only looking at public internet traffic is a mistake since this isn't
solely where AWS is trying to compete. You need to consider _all_ hosting,
including government, intranet and other private players, which AWS does
attempt to capture.

~~~
bransonf
This is a really good point and really reinforces the take that Amazon isn’t
as big as many of us believe.

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aSplash0fDerp
I spent a decade working in American Malls prior to the turn of the century
and think Amazon has done a brilliant job of flipping the playbook and the
playground of retail the past 20 years.

Instead of competing with 800 lb gorillas, Amazon turned many of the prior
juggernauts into 2-tons of turd by making them move. Seeing anchor stores
shutter and go bankrupt was a good indication of how slow businesses move,
even post dot-com era.

In the "monkey see, monkey do" modern world (of commerce [too]), they keep on
implementing things the monkey can't do (<48 hr shipping, airline fleets, AWS,
space, etc) and provide the new curve to aim ahead of in commerce (analog,
digital and hybrid) for the foreseeable future.

Amazon has to thoroughly annihilate a larger piece of the market(s) before
they can be called a monopoly (its slash and burn farming in a way). We'll see
how much longer they can keep the champagne flowing.

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einpoklum
The 5% figure is out of _total US retail_, not online retail.

Just the fact that Amazon is now measured up against all retail is kind of
frightening.

~~~
gen3
And yet it still pales in comparison to Walmart.

~~~
einpoklum
It doesn't pale. It's like a quarter or WalMart in terms of US sales, if I'm
not mistaken.

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gerdesj
Is Amazon a monopoly? Does Amazon indulge in monopolistic practices? Rather
than dance around an issue, state outright the real question that is being
addressed or being glossed over.

Market share of what exactly? and is 5 or 35 even important as figures. For
example the Walmart figure - does that include overseas assets. Walmart own
Asda in the UK for example. Amazon act in mysterious ways in quite a few
supply chains that say Walmart could not even dream of. I don't think the
examples, figures etc are rigorous or useful.

So, what question is the blog really answering?

~~~
onlyrealcuzzo
Not every article is even posing a question, let alone answering it. You could
argue that's what a good article does. But some articles are just a series of
things the writer finds interesting.

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ikeboy
>Splitting out GMV is important because Amazon isn’t setting the price or
choosing the selection for the third party Marketplace

Well. In some cases, Amazon will drop a third party's price for them and
reimburse the difference - in other cases Amazon will simply unpublish the
buybox/add to cart buttons.

Anyway, IMO the relevant market definition is online orders with 2 day
shipping. I believe Amazon has well over 50% market share there.

This is relevant because if you're ordering something to receive within two
days, buying from another site that only promises to get it to you within 4
days may not be an option for you.

~~~
ineedasername
I fail to see how third pary sellers, of which Amazon take a cut, are
significantly different that suppliers if traditional retail outlets. The
primary difference is less risk for Amazon, but otherwise they seem to have a
very similar relationship of traditional retail <-> supplier. Not the same,
no, but similar enough not to split hairs on the topic when discussing
Amazon's market influence.

~~~
ikeboy
Agreed. Recently Amazon stopped showing addresses to sellers for FBA orders.
If you don't even know who your customer is, it's hard to argue you are the
retailer.

~~~
brianwawok
Emails and phones have been gone a while. Essentially all you get is a generic
amazon hosted forwarding email address if you want to talk to your customers.

~~~
ikeboy
Yeah, it's the physical addresses that were removed recently.

Phones were removed about two years ago if I recall correctly.

~~~
brianwawok
Phone removal happened in waves. The most recent wave was about 6 months ago.
Fba phone numbers went to amazon owned phone numbers with giant extensions

~~~
ikeboy
Iirc, FBA phones hadn't been available for two years, it's MF phone numbers
that got proxied to Amazon phone numbers six months back. Then 1-2 months ago
FBA addresses vanished.

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berniepebbles
It depends... When asked by regulators, 5% market share. When asked by
customers, 35% market share.

Joking aside, Peter Thiel has great commentary on how companies avoid the
monopoly label by claiming to be part of a larger community. A classic example
is that Google search has at least 70%+ market share. However, when asked by
regulators, they’re a “tech company” with many competitors and have a
significantly lower market share.

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chx
We know how big a mess Marketplace is but I never realized how awfully big
that was:

1\. 58% of global Amazon ecommerce is actually made by third parties using its
platform, not by Amazon itself

2\. This 58%, the global third party sales were $160bn

3\. Amazon charged a whopping $43bn in fees for this. That's 27%... and it is
still worth sellers to use the Amazon platform.

~~~
bryanrasmussen
How much of the 58% are fakes or worse, then we can start figuring out really
how worthwhile it is for sellers

------
cleandreams
I didn't like the analysis because markets are mushed together. Amazon market
share for cars and books is different. It is meaningless to analyze the
monopoly impact where monopoly is defined as the whole market for all us
goods. They have to be broken out or corrective action will be postponed for
too long.

~~~
YokoZar
The author makes this exact point if you read past the 3 bullet points up top,
such as the part about how Amazon has 50% of book sales, noting that to
regulators it matters how you slice it.

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Yizahi
Is Amazon "monopoly"? Yes, just like Google. How to verify it? Block every
single address used by Amazon (or Google) and watch your internet and gadgets
revert to the stone age and stop working completely. That is a de-facto
"monopoly".

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holoduke
I wonder if there is a potential likely scenario that one or more tech
companies infiltrate the political system and slowly transform it into an evil
techocracy. Maybe we are in that progress already.

~~~
throwaway1777
Pretty much the definition of lobbying...

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spyckie2
I think the more important number is not market share but profit margin / cost
per goods sold. That's the number stores have to beat or compete with.

------
fouc
Why are people so concerned about Amazon but not about Google?

~~~
rightbyte
I believe it's becouse Google is more abstract. Local stores are not shutting
down due to Google. However I am equally concerned about Google.

------
sajid
Amazon's current market share (whether online or overall US retail) is not the
point.

The point is how fast is that market share growing and where will it be in
(say) 10 years time?

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WilTimSon
What's scary about Amazon for me isn't its future takeover of the US market.
I'm more worried about it taking over all markets in the civilized world.
Europeans are already using Amazon to purchase things online massively and I
don't know what the situation is like in Australia but I'd bet a keg of beer
that Amazon will have a substantial market share on all continents and in most
civilized countries by 2025 if it doesn't already. There's very little one can
do to stop this kind of juggernaut enterprise barring some local laws and
sanctions. Amazon is also going to change the future of commerce, already has,
really.

~~~
rightbyte
On the opposite. It is really easy to stop big corparations barring laws. Way
easier than small.

If authorities would hold Amazon responsible for the scams and IP infrightment
on their platform Amazon would have to kick out half of their sellers.

