Why Amazon Has No Real Western Rivals in E-Commerce

BBC Business reported Saturday that Amazon commands roughly 40% of all online retail sales in the United States. Its nearest rival, Walmart, sits at just 9.2%. No Western competitor has come close to closing that gap.

A Scale No One Can Match

Amazon’s reach extends far beyond a shopping cart. The company owns the Whole Foods supermarket chain and operates Kindle devices and Prime Video. Its cloud unit, Amazon Web Services, remains its most profitable division. Earlier this year, Amazon overtook Walmart as the world’s largest company by annual revenue. In the UK, Amazon accounts for roughly 30% of online retail, dwarfing domestic competitors.

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How the Lead Was Built

University of Surrey professor Annabelle Gawer, director of the Centre of Digital Economy, told BBC Business that Amazon is “the dominant firm” in e-commerce. Its product scope, she added, is simply unparalleled. Harvard Business School professor emeritus David Yoffie pointed to a critical structural advantage. For years, Amazon’s shareholders tolerated sustained losses and forgone dividends. Traditional retailers could never have pursued the same strategy without destroying their stock price. That patience allowed Amazon to reinvest aggressively, scale rapidly and constrain competition before rivals could respond.

The Platform Pivot That Changed Everything

Two decisions proved particularly decisive. In 2000, Amazon opened its marketplace to third-party sellers. The move created a self-reinforcing loop. More sellers brought more products, which retained customers, which attracted still more sellers. Harvard professor Sunil Gupta told the BBC that breaking that network effect is now extremely difficult for any new entrant. Five years later, Amazon launched Prime in the US, bundling fast and free delivery into an annual subscription. The UK followed in 2007. The service made Amazon deeply habitual for tens of millions of households.

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Competition Exists, But Remains Distant

Challengers do exist at the margins. Walmart and Target are expanding their online arms quickly. Tesco leads UK online groceries. Zalando dominates German fashion e-commerce. Chinese platforms Temu and Shein have carved out a niche in ultra-low-cost goods. eBay, which recently received a $55.5 billion takeover approach from GameStop, focuses on auctions and secondhand items rather than head-to-head retail competition. None poses a structural threat to Amazon’s overall position. AWS continues to subsidise retail operations, funding the low margins and bold experiments that built the empire in the first place.

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