Shipping with Amazon service primes online giant to become world’s first $1 trillion company, says ParcelHero

In its April 2016 report the e-commerce delivery expert ParcelHero predicted Amazon would become a logistics company. Now Amazon has launched end-to-end delivery services, as part of its ambition to embed its services into all our lives, and storm to a $1 trillion valuation later this year.

Amazon is on its way to becoming a new kind of retail and services provider that is embedded in all our lives – even if we don’t actually shop with the e-commerce giant. So says the e-commerce expert ParcelHero, which predicted in a report two years ago that Amazon would launch its own end-to-end delivery service, as it seeks to become the pipe through which all retail flows.

The launch of Shipping with Amazon (SWA) in Los Angeles this February saw ParcelHero’s prediction come true. The Wall Street Journal reports Amazon will swiftly roll out the delivery service to third party merchants before making shipping services available to anyone and everyone.

Says ParcelHero’s head of consumer research, David Jinks: “Together with its fast-growing cloud network, huge warehouse expansion programme, and increase in services such as TV and even healthcare, Amazon is barrelling towards becoming the world’s first $1 trillion company – just as predicted in our 2016 report Amazon’s Prime Ambition.

“Amazon’s multi-channel approach to retail and services means is able to rise above the challenges that saw its rivals Toys R’Us and Maplin’s falter last week, and New Look looking to shed around 60 stores. Amazon competes in all those sectors, and yet is even opening physical stores as rivals collapse around it. What sets it apart is that it has become an entirely new kind of business. It’s now an e-commerce store, a High Street retailer, a logistics provider, a cloud computing provider, a broadcaster and you can even use it to book a plumber.”

The impact of Amazon Logistics deliveries in the UK has already revolutionised the parcel industry here. By August last year Amazon had already grabbed a 7% share of the UK delivery market; to put that into perspective Yodel had 8% with Hermes 11%. Observes Jinks: “Little wonder news of the launch of Amazon’s next phase, Shipping With Amazon, earlier this year, wiped 1% off the value of Royal Mail in a single day.”

But Jinks says Amazon’s supply chain potential does not end there: “The real scope of Amazon’s ambitions is revealed in its China operations, where it has launched Amazon Logistics+. Any wholesaler can use Amazon to ship goods around the world by sea, land or air, not just Amazon sellers. Exactly as Shipping With Amazon will do for anyone wanting to send a parcel in the US and UK.

“As if this isn’t enough, Amazon’s high-growth public cloud business saw a 45% spike in revenues, to over $5.1 billion, Add to this its move into one-hour grocery deliveries and checkout-free High Street stores and its potential for growth seems limitless.

“And our report reveals many more areas Amazon is moving into. For example, it has patented 3D printing machines that can manufacture products on board its vans on the move; and just last week it bought a video doorbell company called Ring to enable deliveries to your home even when you are out. Add to this mix its Internet of Things services, and the retail giant will become deeply embedded in every aspect of our lives before we even know it.

“Right now it looks as if it’s a straight race between Apple and Amazon as to which becomes the first ever member of the $1 trillion club. Apple’s market cap was $887bn on Friday, still outgunning Amazon’s $772bn. But Apple can’t hope to match the breadth of Amazon’s products and services. It’s going to be a fascinating battle.”