Amazon and Walmart are two big competitors in e-commerce. Amazon expert Jason Del Rey (Vox) in an interview shares his thoughts, “there’s room for both.”
Key Takes:
- Amazon and Walmart are major players in e-commerce
- Jason Del Rey of Recode thinks both companies can coexist and grow in the industry
- Walmart has made a push in the grocery market, acquiring companies such as Bonobos and Jet.com
- Amazon has a strong presence in urban areas through its acquisition of Whole Foods and its Amazon Prime membership
- Walmart is well-established with physical stores and a broad customer base
Jason Del Rey has been published in Vox; he writes about Amazon and how the e-commerce giant has been dominating the US e-commerce market for years. In an interview in Too Embarrassed to Ask, Del Rey answers some of the frequently asked questions about Amazon’s future, and how the giant will face the tough competition by Walmart’s rise in the US market. [Interview Walmart ReyVox]
Everyone thinks that Amazon has been and will be on the top and it may actually be true, given its dominance. However, Walmart has slowly been rising and making its way to the top.
In this interview with Recode’s Jason Del Rey and Kara Swisher, the experts say that Walmart has been buying some big companies to rival Amazon. In June 2017, Walmart made an announcement to buy Bonobos, a men’s clothing brand, for $310 million.
On the other hand, Amazon announced the acquisition of Whole Foods for a whopping $13.7 billion, on the SAME DAY that Walmart made the announcement of the Bonobos deal. This gives us an idea that the players are fighting for the top place now.
“I think you’re going to see Walmart, especially if this Whole Foods deal goes through … You know, they’ve been making a big push in grocery, I think they’re really going to push that hard,” stated Del Rey. “There’s totally room for both of them,” he added.
Additionally, Walmart bought Jet.com for $3 billion in 2016 in an attempt to bag high-tech talent within its ecosystem.
“You don’t spend $3 billion on a very young business that had not proven it was sustainable in any way on its own if you feel like you’re in an even average position,” said Jason Del Rey. “Any retail sector, Amazon wants to own a big piece of it and help it move online,” he said. [Interview Walmart ReyVox]
After that, Del Rey talked about Amazon Prime and the huge $99 per year package of Amazon prime that most Americans don’t like. According to Del Rey, Amazon needs to bring the price down if they want to remain relevant. He also added that some Americans think of Amazon as the store business killer in Uncle Sam.
To that, Swisher said, “That used to be Walmart.” Del Rey responded that Walmart is still the same, while Amazon is becoming the new Walmart.
Bottom Line
In the US, Amazon and Walmart are two giant corporations competing for the top spot. The competition got heated when Amazon declared its intention to purchase Whole Foods for $13.7 billion and Walmart followed by acquiring Bonobos for $310 million.
Jason Del Rey of Recode believes there’s room for both companies to succeed. He argues that Walmart is making it big in the grocery industry and will continue to do so if the Whole Foods deal goes through, which it did.
Meanwhile, Amazon’s acquisition of Whole Foods has given it a more significant presence in urban areas and the ability to reach Prime members. Despite this, Walmart still holds an advantage with its well-established physical stores and broad customer base across all income levels in the United States.
The perceived negative image to the average American of Amazon and Walmart’s strong reputation means both companies have room to coexist and grow in the e-commerce sector. [Interview Walmart ReyVox]
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