Amazon, an online giant, has become the world’s highest-selling company, beating Walmart, an offline distribution powerhouse. Analysts say it is a historical milestone that symbolizes that the central axis of distribution has completely moved from offline to online and technology.
According to the results released by Amazon and Walmart, Amazon’s annual sales amounted to $716.9 billion, narrowly beating Walmart. It is the first time in decades that Walmart has given up the world’s No. 1 position in terms of sales.
Amazon, which already overtook Walmart in quarterly revenue about a year ago, has finally taken the “throne” in its full-year earnings, boosted by explosive growth in cloud (AWS), digital advertising, and third-party seller services.
The joys and sorrows of the two companies are divided over their artificial intelligence (AI) strategy. Walmart is focusing on increasing convenience through its partnership strategy by actively joining hands with external technologies such as Google’s Gemini and OpenAI’s Chat GPT. In fact, customers who use Walmart’s AI shopping assistant “Sparky” are 35 percent more expensive than ordinary customers.
Amazon, on the other hand, is pursuing an “infrastructure independent line” that will spend $200 billion on building AI infrastructure this year alone. The plan is to advance its own shopping chatbot, Rufus, and to completely dominate AI hegemony by securing data centers and dedicated chips.
However, market reactions are mixed. Despite Amazon’s symbolic title of world No. 1 in sales, Wall Street is concerned about Amazon’s astronomical cost of AI investment. In fact, Amazon’s stock price declined for nine consecutive trading days after the earnings announcement due to caution against excessive capital spending.
JENNIFER KIM
US ASIA JOURNAL
