Despite the popularity of private labeling as a topic in the marketplaces market, few companies have been able to scale it to the $100 million a year level and beyond. For the last couple of years the leading marketplace sellers were using software to scale retail arbitrage. We think the most interesting sellers right now are the ones investing heavily into artificial intelligence.
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On Wednesday KPCB partner Mary Meeker released annual Internet Trends 2017 report. Her findings were that Amazon sells more batteries than brands like Duracell and Energizer, owning more than 30 percent of the US market. Duracell, a company incorporated 93 years ago in 1924, found themselves outsold by unrecognizable Amazon Basics. The conversation of Amazon destroying brands is missing one key area, though. It is missing the impact of marketplace sellers.
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The unique idea powering marketplaces is the hiding of complexity in picking a retailer. Instead of a customer spending time to find the best deal, and the best shipping option, a marketplace like Amazon suggest the best one. But we think this can be taken even further - a marketplace which hides the complexity of picking a product.
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Amazon has so far done really well by launching generic products - products which do not depend on a brand. Batteries, cables, other electronics are a good examples of this. But Amazon hasn't yet figured out how to build brands. Sales of Lark & Ro apparel products are growing, but likely a lot of this is driven by search optimization and Amazon prioritizing own products.
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At least 55 cents of every new dollar spent in US e-commerce is on Amazon, and analysts estimate that by 2021 Amazon will account for more than 50% of all US e-commerce spending. We think e-commerce business which fail to realize where the market is heading are going to waste a lot of resources trying to compete in a market they cannot win. Un-Amazon-Able are the only brands and e-commerce businesses that will be able to survive Amazon's growing e-commerce presence.
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Amazon has unique and unrivaled visibility into the performance of hundreds of thousands of products and brands. Just like Netflix is investing into TV shows based on data they collect, Amazon is starting to build brands based on data. But Amazon could also avoid doing most of the work, and instead invest into the brands already performing well.
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This time we looked at how many of the top Amazon sellers have joined in the past 365 days. It is an interesting number to look at because as we found, it shows that it takes a while to become a top seller. We found that just 5.6% of top 10,000 sellers joined during the past 365 days.
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We are continuing to research brands - recently we were able to build a reliable way to detect private label brands. Thus this time we are sharing top 25 brands based on reviews who enjoy the luxury of having no competition.
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We ran some numbers and found that roughly 10% of TOP 10,000 brands on Amazon are sold by a single seller. Out of TOP 1,000, which includes Sony, Hewlett Packard, Fisher Price, and many other major brands, 5% of of them are sold by one seller. We see a trend of manufacturers selling directly on Amazon, and new brands being created by retailers themselves, so this percentage should increase over time.
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Amazon USA marketplace added 54,000 new sellers in a month. 120,000 new sellers joined all Amazon marketplaces in a month. Since we looked at this back in July, the growth rate has accelerated and Amazon USA has remained growing at a steady pace.
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