Amazon to account for 20% of UK online spend by 2024
Amazon is set to continue experiencing exponential growth with UK retail revenue set to rise 58.2% over the next five years to reach £15.7bn by 2024, according to GlobalData, a leading data and analytics company.
GlobalData’s report: ‘Amazon Strategic Review – 2019’ reveals that the food & grocery sector is anticipated to be the largest growth area for Amazon, rising 174.7% between 2019 and 2024, in comparison to the total grocery sector which is forecast to grow by 15.5% over the same period.
James Yacoub, Retail Analyst for GlobalData commented: “Although food has not historically been a focal point for the online pureplay, it will prioritise investment in this sector through ramping up its Amazon Fresh operation, developing Whole Foods and introducing its checkout-free Amazon Go stores. Overall Amazon will grow its total online market share to 19.8% in 2024, up from 16.6% in 2019.”
Amazon will aim to gain more control over its distribution network by investing in more fulfilment centres, transport vehicles and automation, helping it to streamline its operating expenses in the long run. Its acquisition strategy is evidence of this – in 2019 Amazon demonstrated vertical integration through its purchase of robotics company Dispatch which specialises in autonomous vehicles, robotics and artificial intelligence.
Yacoub added: “Amazon has invested in the latest thematic trends in retail from the onset of its growth, with a particular focus on its delivery infrastructure, artificial intelligence and automation. Prime’s success has been made possible by Amazon’s focus on last mile fulfilment, and 19.4% of UK online shoppers are now Prime subscribers. Amazon will continue to optimize its efficiency in its last mile delivery which remains to be the most costly aspect of fulfilment”.
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