Is it a peek into the future? In after-hours trading in the US on Thursday, e-tail giant Amazon shot past retail behemoth Walmart in market value. Amazon’s stock price jumped by over 14%—after the company reported strong quarterly earnings results—pushing its market value to above $250 billion. Walmart’s market value stood at above $230 billion at the end of the day. It could be that this upsurge will be fleeting, but it definitely means investors see
online retail beating out brick-and-mortar stores in the future.
This is despite the fact that e-tail constitutes only 7% of US retail, where the two companies are leading players in their respective segments. But this means the room for growth for Amazon is vast, especially since virtual presence ensures e-tail can have a reach and a product range unimaginable for brick-and-mortar shops. Though Walmart’s annual sales, at $486 billion in 2014, make Amazon’s $89 billion seem meagre, e-tail being a sunrise sector means this gap could soon close. In India, the e-tail juggernaut is planning to enter rural and semi-urban markets, where the low penetration of organised retail gives it, and other players like Flipkart, an expansive playing field. Growth prospects for Walmart’s core business, on the other hand, seem to be sinking—while in the US, it has expanded, as per a report in Quartz, a news and analysis website, beyond the existing market for superstores, its forays into India and China, two large markets, have been thwarted by policy in the two countries.