[Overseas Stocks Spotlight] "Amazon, Growing Expectations for the Year-End Shopping Season"

[Asia Economy Reporter Eunmo Koo] Amazon (Amazon·AMZN.US) is expected to be the biggest beneficiary of the year-end shopping season as it has secured overwhelming competitiveness in logistics and delivery.

Earlier, Amazon announced that this year’s Prime Day event will be held on the 13th and 14th. Jaeyim Kim, a researcher at Hana Financial Investment, stated in a report on the 11th, “Amazon is highly optimistic about demand for Prime Day and the year-end shopping season through aggressive hiring expansion and facility expansion,” adding, “It is judged that they are fully prepared to adequately respond to the demand.”

In early September, Amazon announced the hiring of 33,000 full-time employees mainly for general office and engineering positions, and in mid-September, it announced the hiring of 100,000 full-time employees (including part-time) mainly for logistics and delivery positions in North America alone. Researcher Kim predicted, “After increasing about 150,000 employees in the second half of last year for Prime one-day delivery, employment expansion this year is expected to far exceed that when considering overseas regions.”

Amazon also opened 100 logistics facility buildings, including logistics centers, delivery, and sorting workplaces, in September. This year, 75 new facilities have already been put into operation in North America, bringing the total number of additional facilities to 175. This is more than double last year’s 74 and significantly exceeds market expectations.

According to Deloitte, the total online shopping volume in North America this year-end is expected to grow 25-35% compared to the previous year, a much larger growth rate than the 13.6% in 2019. Additionally, commerce platform-based data predicts that the online share in retail during this year-end shopping season will more than double from 14% last year to about 30%. Due to COVID-19, spending on year-end gifts has significantly increased as travel, dining out, and outdoor activities have been reduced, with a particular focus on online purchases.

This market expansion is expected to be a major benefit for Amazon, which has overwhelming competitiveness in logistics and delivery. Researcher Kim said, “Amazon’s North American sales growth in Q4 last year (+21%) significantly outpaced the overall North American year-end online shopping growth (+14%),” and added, “This year, since the online retail market itself is expected to grow more than 25% at year-end, Amazon’s Q4 sales growth will greatly exceed the current market expectation (+27%).” He added, “The online retail market is expanding faster than expected, and Amazon, which is strategically expanding logistics and delivery facilities and workforce with overwhelming competitiveness, will further increase its market share.”