Why Is Amazon Unmatched in the West?

Vitamins, repair tape, and a jar of mango chutney—these were just a few of the items my family purchased last month through Amazon’s vast digital marketplace. Our household also utilizes Whole Foods for groceries, streams Amazon Originals, reads on Kindle devices, and undoubtedly relies on Amazon Web Services (AWS) for countless other websites. This interconnected ecosystem represents only a fraction of the services offered by the global giant, which recently surpassed Walmart to become the world’s largest company by annual revenue. Yet, the question remains: why does Amazon, which Jeff Bezos launched in 1995 as a garage-based online bookstore, face so few formidable competitors in the Western e-commerce sector? Wouldn’t consumers benefit from a more competitive landscape?

It is important to note that Amazon does have rivals in every segment it operates within. In the United States, major brick-and-mortar retailers like Walmart and Target have rapidly expanded their online retail divisions and launched their own subscription services similar to Prime. In the UK, Tesco dominates online grocery shopping, while Germany’s largest internet fashion retailer is Zalando. Furthermore, Chinese platforms Temu and Shein have become significant forces in the ultra-low-cost market. Additionally, eBay, which recently rejected a $55.5 billion (£41 billion) acquisition offer from video game retailer GameStop, remains a key player. Although eBay operates on a different model focused on auctions, second-hand goods, and collectibles, and GameStop expressed hopes that it could challenge Amazon, eBay’s current market position is far behind.

The disparity in market share is stark. According to recent data, Amazon controls 40.5% of all US online retail sales, whereas its closest competitor, Walmart, holds only 9.2%, and eBay sits at approximately 3%. A similar dominance is seen in the UK, where Amazon accounts for roughly 30% of online retail sales. “Amazon is not an undisputed monopolist in e-commerce, but it is the dominant firm,” explains Annabelle Gawer, director of the Centre of Digital Economy at the University of Surrey. “And the scope of what it sells is unparalleled.”

Experts attribute Amazon’s resilience to a combination of strategic factors. Chief among them is a “first-mover” advantage. As one of the earliest companies to scale online retail, Amazon possessed a clear vision of how the internet could transform shopping through convenience and speed, allowing it to capture market share more rapidly than competitors. Equally critical was the long-term patience of its shareholders, who allowed the company to operate at a loss for years by selling products below cost, and later permitted the aggressive reinvestment of early profits into business growth. To this day, Amazon has never distributed a dividend to shareholders.

“This strategy constrained the competition,” notes David Yoffie, professor emeritus at Harvard Business School. He explains that traditional companies attempting the same approach would have faced severe stock price declines and shareholder backlash. Today, Amazon leverages funds from its most profitable division—AWS, its primary profit engine—to subsidize its lower-margin retail operations and fund new ventures.

Furthermore, Amazon’s self-positioning as a technology firm has been advantageous. The company has relied heavily on algorithms, automation, and data to drive efficiency and enhance the customer experience, enabling massive scalability. Sunil Gupta, also a professor at HBS, highlights Amazon’s culture of bold experimentation. The company has entered diverse sectors ranging from cloud computing and consumer electronics to private-label goods, original content production, and healthcare, readily abandoning initiatives that fail.

Experts also identify two pivotal business shifts as crucial to Amazon’s success. The first, implemented in 2000, marked the transition from a pure online retailer to an online platform, enabling third-party sellers to operate on its infrastructure.

Source: BBC News Generated at: 2026-05-18 07:25:14 UTC