Market Concentration in eCommerce: In North America, Large Companies Prevail

It is a fact of life that the winner takes it all – and the concentration of eCommerce markets confirms this. If we measure the net sales of the top 5 online stores relative to the top 100 stores in each market, we find that the top 5 stores typically account for about half of total sales.

This trend is most pronounced in North America. Most European markets tend to have less concentration than that, but there are exceptions. Here is where the biggest eCommerce stores capture an outsized share of total online sales, leaving a much smaller portion for the rest of the market.

Canada, USA and Mexico Have Highest Concentration

The three North American (or Central American) markets under consideration, the United States, Canada and Mexico, have a much higher concentration of eCommerce revenues than the European markets.

In Canada, 60% of the eCommerce revenues of the top 100 online stores are generated by the top 5 online stores. The United States follows with 55%, and Mexico with 54%.

For the top 5 online stores in North America, the case is clear: Walmart is unanimously represented in the top 5 in Canada, the U.S. and Mexico. In Canada and the U.S., it ranks second behind Amazon, and in Mexico, third behind Coppel.

Due to Walmart’s sheer size and impressive growth over the past few years, it has managed to approach market leader Amazon in terms of product competitiveness and convenience. As a result, it contributes significantly to the share of net sales in each market.

European Markets Tend to Be Less Concentrated

In Europe, market concentration is lower. Italy stands out with a share of the top 5 online stores that exceeds 50%. The United Kingdom, Spain and Germany have a top 5 concentration between 40% and 50%, while France is lowest with 39.2%.

Amazon also ranks first in each of these markets. Beyond the top spot, the mix differs more from the North American markets. Two of the winners that stand out with high penetration, though not at the level of Walmart, are Shein and Zalando.

Shein ranks second in Italy, Spain and France. Zalando ranks third in Germany and fourth in Italy. With the exception of Apple, the remaining online stores in the top 5 are domestic players with good market recognition.

Examples include Otto (second in Germany), Tesco (second in the UK), and El Corte Ingles (third place in Spain).

The higher domestic representation in the top 5 contributes to the lower market concentration: Because these retailers tend to be less expansive than giants like Amazon and Walmart, their respective share of the total is less pronounced.

Smaller Online Stores Generate Most in Germany

The top 6-25 online stores provide further insight: Looking at the top 25 online stores in each market, Mexico becomes the most concentrated market, with 86% of the top 100’s revenue generated by the top 25.

Canada and the U.S. are second highest, with 84% of the top 100's revenue generated by the top 25 stores. In Europe, the United Kingdom comes closest with 81%.

In the other markets, Italy, Spain, France and especially Germany, a larger share of the top 100's net sales comes from smaller online stores. This points to a more competitive market, where the smaller retailers in the top 100 still have a not insignificant share of net sales.

Outlook: Growing Market Concentration Everywhere

Amazon ranks first in every market considered in this analysis. Its maturity is likely to have a profound effect on overall market concentration. Amazon launched first in the U.S. and soon after in Canada and Mexico. Its penetration in these markets is correspondingly high.

As it subsequently increases its market share in other markets, concentration is also very likely going to increase. Therefore, each of the markets is expected to become more concentrated over time.