Amazon is turning 30 years old in 2024. On July 5, the online retailer enters its third decade, now the global leader in online sales. How did it grow to become the biggest digital storefront and is there more room for it to grow?
In 1994 Jeff Bezos founded an online bookstore; through a series of clever decisions re-invented the way customers shop online. The e-commerce market has boomed in the shadow of Amazon and after 30 years the store remains as successful as ever – but its growth is notably slowing.
In its first five years of operation, Amazon generated $650 million in yearly sales, making up 5% of all e-commerce sales in the US. By its 25th anniversary in 2019, the company had ballooned to an estimated $540 billion in sales and an incredible 15.6% of the e-commerce market.
Does a company that’s grown so much in 30 years have anywhere to go? Amazon remains the highest visited e-commerce site in the US and its stability signals the state of e-commerce across the country. But its growth might not be perpetual.
Has e-commerce reached its peak?
Covid-19 took a huge toll on the retail sector, even for delivery-based services like Amazon. While 2020 brought the company an initial spike in revenue, it quickly dropped as shoppers’ purse strings tightened.
In 2023 Amazon’s share of the e-commerce market remained below 15%, not yet catching up to its pre-pandemic heights. In the four years since the pandemic began, Amazon’s share of retail revenue has only grown 0.5%.
This is in line with the rest of the e-commerce sector. While online sales have been growing, their rate has slowed significantly. Sites that once saw a decade of consistent 20% increases were faced with single-digit growth in 2021 and 2022. Now, as e-commerce begins to stabilize, eMarketer predicts growth of 12% a year for the next three years.
While 12% growth signals a small recovery for the e-commerce industry, it is still well below the rates it experienced in the 2000s and 2010s. For years e-commerce grew as more consumers embraced the internet as a new shopping ground, but it seems that the industry may be facing market saturation.
E-commerce has hit its peak and the days of unending expansion are behind us. That’s not to say that companies like Amazon won’t continue to grow – they will – but they won’t expand as rapidly as they have in the past.
What does this mean for Amazon marketers?
As Amazon has grown, so too has its support for advertisers on its platform. This won’t change. The site, even with slowed growth, still maintains a high customer base well worth targeting.
During the height of the Covid-19 pandemic online advertising boomed – reaching people in the safety of their own homes. Since this peak started its decline, so too have ad rates. While un-nerving for advertisers, this isn’t unexpected. So long as advertisers have a well-rounded and diverse journey advertising strategy, adapting to market shifts like this is easy.
Amazon may not be booming like it once was, but after 30 years in business, it remains a pillar in the e-commerce industry. This giant of online retail isn’t going anywhere, and neither are its customers.
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