Mobile Payments Leader Amazon Still a “Powerhouse” Beyond the Retail: eMarketer

Amazon has long been a major target for mobile payments users looking to do some quick shopping wherever they happen to be at the time. It’s also taken its share of the blame—and then some—for giving the brick-and-mortar retail industry some serious indigestion and sleepless nights. Recently, eMarketer sent a report our way generated by its principal analyst Andrew Lipsman, and the news is good for Amazon. The oddest point, though, is that the news is good for reasons largely unrelated to retail.

Lipsman’s report offered insight on Amazon’s impressive quarter, and the primary reason had little to do with Amazon’s ability to sell just about any product under the sun under one handy website roof. No, it was rather related to Amazon Web Services, Amazon’s cloud operations.

Lipsman noted “While AWS’ momentum continues unabated and is the clearly the bigger driver of this profit story at the moment, the advertising flywheel now appears to be in full effect for Amazon and will only be a bigger part of the growth story over the near term.”

The “advertising flywheel”? As it turns out, advertising is big stakes for Amazon, who’s expecting ad revenue to reach $14.03 billion this year, making it the third largest digital ad publisher behind Google and Facebook. That’s got some odd implications for mobile payments—the concept of a “buy button” comes immediately to mind—but it’s clear that Amazon is more than just mobile payments and impulse shopping writ large. Advertising on a platform built around buying is almost a hand-in-glove fit.

However, don’t make the mistake of thinking that Amazon is out of the party on retail; it still holds 47 percent of the retail ecommerce share in the United States by itself. Its closest competitor, eBay, holds an anemic-by-comparison 6.1 percent. Walmart, meanwhile, can barely croak out a 4.6  percent figure, which means Amazon’s share is better than 10 times what Walmart is packing. Given reports that Walmart is actively closing stores and restraining construction of new ones, this carries a little extra weight.

While Amazon will be heavily into retail for the foreseeable future, it’s clearly branching out from retail into other sectors. Amazon’s diversity of revenue streams will likely be helpful going forward, a point that certainly can’t be lost on investors.