Amazon to overtake Walmart in beauty, says Morgan Stanley

FROM books to cloud computing, Amazon.com has gone on to dominate many segments over the years. Now Morgan Stanley projects that the e-commerce giant will become the biggest player in another space: beauty.

Amazon is set to overtake Walmart as the biggest US beauty retailer by 2025, analysts led by Simeon Gutman wrote in a research note. Amazon will make up about 14.5 per cent of a market that could hit US$180 billion in value by 2025, followed by the Bentonville, Arkansas-based retailer at about 13 per cent.

While grocery retailers still hold a leading share of about 29 per cent of the US beauty market, their portion has shrunk over time with specialist retailers like Ulta Beauty and Sephora among the biggest beneficiaries.

Amazon’s gains are set to come as the company continues to grow its share in the e-commerce market, set to account for 46.5 per cent of it by 2025, Gutman wrote in the note.

Amazon gained 0.6 per cent on Tuesday, while Walmart slipped less than 1 per cent. Amazon shares, which lost nearly half their value last year as routs ravaged technology and growth stocks, have rebounded this year to rise 50 per cent. Meanwhile, Walmart shares have seen a relatively steadier growth curve over the past five years, and the stock is up 9.3 per cent in 2023. BLOOMBERG