Amazon has reported that since Amazon Lending launch they have issued more than $3 billion in loans to 20,000 marketplace sellers in the US, UK, and Japan. In the last 12 months alone, Amazon has loaned more than $1 billion. We expect the lending volume to continue to rise, because Alibaba has been doing similar work since 2004 and has reached scale way beyond Amazon Lending - $100 billion in loans already.
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In the Toys & Games category on Amazon.com 8 out of the Top 10 products are currently fidget spinners. Many have dismissed the fidget spinner as a fad, including the top toy makers. But they missed the point of what made this toy so successful. It was successful exactly because it was a fad. The fidget spinner as a product is showcasing what the modern retail is going to look like. It is important to not think about this as trends catching, but as a challenge to set up companies to be agile in product making.
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Despite the popularity of private labeling as a topic in the marketplaces market, few companies have been able to scale it to the $100 million a year level and beyond. For the last couple of years the leading marketplace sellers were using software to scale retail arbitrage. We think the most interesting sellers right now are the ones investing heavily into artificial intelligence.
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The U.S. Chamber of Commerce Global estimates the global counterfeit market at $461 billion. Every year over $50 billion worth of products are sold on Amazon marketplaces by third-party sellers, yet none of those billions of products are controlled by Amazon. The problem of counterfeit is much bigger than Amazon, but the marketplace model and the number of visitors of Amazon makes it one of the most lucrative places to move products through.
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Just 10 years ago e-commerce penetration in China was less than 1 percent, but since then has taken off - it overtook US in 2013, and is expected that by the end of 2018 it will reach 18 percent market penetration.
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On Wednesday KPCB partner Mary Meeker released annual Internet Trends 2017 report. Her findings were that Amazon sells more batteries than brands like Duracell and Energizer, owning more than 30 percent of the US market. Duracell, a company incorporated 93 years ago in 1924, found themselves outsold by unrecognizable Amazon Basics. The conversation of Amazon destroying brands is missing one key area, though. It is missing the impact of marketplace sellers.
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Previously thieves had to break in to brick-and-mortar stores or warehouses, and grab what they could carry. Imagine paying $2.50 and walking away with $220,000 without leaving your house. The Amazon marketplace which generates at least $50 billion in sales a year from the millions of sellers has become a retail economy by itself. This has meant that cyber crime against those marketplace sellers is potentially a very lucrative operation.
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India is the fastest growing market, both in terms of new sellers, and considering how many of them stay active selling for a longer period. At the current rate new seller joins Amazon US marketplace every 30 seconds. For many months now we've been detecting 100,000 new sellers join Amazon marketplaces every 30 days.
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China's e-commerce market represents almost a half of e-commerce sales worldwide, and practically all of it is on domestic websites like Tmall.com and JD.com. Most of the largest e-commerce markets in the world have Amazon and eBay with major market share, but not in China. Many would jump to the conclusion that China is a market favoring local players and US companies have no chance. But this is not the whole picture. Both Amazon and eBay could have had much more market share in China.
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"We want to be bigger than Walmart," said Jack Ma, the founder and CEO of Alibaba Group, in September 2014, when Alibaba began trading in the New York Stock Exchange. It didn't take long. In 2017 fiscal year Walmart's sales were $485.9 billion, while Alibaba's was $547 billion.
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