Clash of the Titans: Walmart/MSFT v. Amazon
by Mae Yen Yap
While shoppers were fighting for the best deals on Amazon’s Prime Day sale, Amazon was facing a different battle.
Walmart Inc. and Microsoft Corp. announced their partnership against Amazon on Tuesday. The five-year partnership is tailored to allow Walmart to use Microsoft’s Azure cloud technology services to transform Walmart’s digital operations against its online retail competitor.
Amazon currently dominates the online retail industry with Walmart being the closest rival. But does the announcement of Walmart and Microsoft’s partnership pose an actual threat?
For several years, Amazon kept its title as the world’s largest e-commerce retailer and cloud service provider. In the U.S. alone, Amazon.com had a total revenue of more than $52 billion.
Retail mega-corporation Walmart was in second place. Walmart was unable to come close to a third of Amazon’s total, however, with reportedly just $14 billion worth of merchandise sold online last year.
Despite being an e-commerce company at its core, Amazon continues to diversify its business. Amazon purchased Whole Foods in 2017, and its subsidiaries AmazonFresh and Amazon Prime Pantry now both provide deliveries for groceries and household supplies.
Its closest competitor Walmart also provides online delivery services. The retail corporation has also began offering same-day delivery for fresh and frozen groceries in selected U.S. areas, in addition to its existing system of Pickup Towers that are still being introduced across the nation, to combat Amazon’s entrance into the grocery business. It seems, however, that a majority of shoppers still prefer to shop for their groceries in person.
Projections for Amazon’s total revenue in the next few years show no stopping. The largest online retailer continues to grow its market across the globe while gaining a monopoly in not just online retailing, but cloud computing and voice control.
As Amazon is competing against Walmart and other grocery stores, there are rumors of its potential debut in the U.S. healthcare market through a pharmaceuticals distribution business. Amazon has grown its revenue at a steady 24% yearly average. On the other hand, Walmart’s revenue growth has not increased noticeably.
But Walmart has been attempting different strategies. There’s been a change in leadership positions within the corporation, it has acquired several startups and its partnering with different Amazon competitors across the globe such as JD.com in China, Rakuten in Japan and Walmart has a $16 billion acquisition over Flipkart in India.
With all those partnerships, it seems Walmart is hoping to expand its own business while driving Amazon out of each respective online market.
The question is, however, if Walmart’s latest partnership with Microsoft can buy the company more time to enter the e-commerce industry before Amazon.com finds a way to completely monopolize it?
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