Assessing Amazon’s Non-US eCommerce & Prime Opportunity

THE COWEN INSIGHT

Our new non-US surveys suggest Amazon’s eCommerce opportunity outside the US is larger than the Street appreciates. While non-US Prime penetration lags the US, our data gives us reasons to be optimistic about rising non-US subs, given outsized adoption by younger cohorts in UK, Germany & Japan. While Amazon’s non-US business accounts for 35% of worldwide gross merchandise volume (GMV), those markets are 50% of its worldwide eCommerce total addressable market. 

New Recurring Surveys in Germany, Japan and UK

In ’19, non-US operations accounted for 31% of Amazon’s revenue, with Germany, the UK and Japan accounting for ~20%. Historically, the company’s successes and operations in those regions have been fairly opaque. Since Jan ’16, Cowen’s monthly proprietary consumer Internet survey has provided prescient insight into key US trends, such as Amazon Prime adoption. We are now augmenting this data with parallel surveys in Germany, Japan & the UK. In total, our surveys now represent ~45% of global GDP ex-China, and we believe our surveys are one of the few tools available to investors to track the progress of major Internet companies outside of the US.

Insight Into Amazon’s Non-US eCommerce Business

In this report, we examine Amazon’s non-US eCommerce biz, including (i) Forecast Prime sub penetration and key trends in Amazon’s largest non-US markets (UK, Germany & Japan) based on our new survey data; (ii) Introduce our new Prime sub model; and (iii) Provide eCommerce market share analysis in US, UK, Germany & Japan.

How The New Data Informs Our Call

The new non-US data is constructive for our investment thesis. We modestly raised our Int’l eCommerce forecast ’21-’25, as positive secular trends such as higher adoption among younger cohorts should drive rising Prime penetration in non-US markets.

Amazon has Ample Runway for Non-US eCommerce Growth

Amazon’s US business  accounts for ~65% of their global eCommerce GMV, per our estimates. Amazon generates 35% of its eCommerce GMV in its non-US markets, while we estimate 50% of its $1.2TN eCommerce TAM resides in non-US markets. Part of the disparity between the US and non-US eCommerce mix is lower Prime penetration in non-US markets, likely due to (i) Higher competition, (ii) Fewer Prime eligible goods relative to US; and (iii) Somewhat muted delivery speed advantage given higher density in certain non-US markets.

For the full report and six part series, contact your Cowen sales representative.

See additional insights from the International Consumer Internet Survey Series:

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