Amazon’s Market Power Decoded by the Amazon Market Dominance Index

Amazon is one of the largest online retailers worldwide. Amazon had an annual turnover of over $280 billion in 2019 but is very reluctant to publish figures and data on the distribution of sales across individual product categories. However, from the retailer’s point of view, these data would be particularly critical to determine the relevance of the sales channel and to understand the competition within specific product categories better. The objective of this study is to build a measure that illustrates Amazon’s market share and dominance in individual product categories to enhance market understanding and to enable retailers to make more informed decisions. By combining various high-quality data sources, we were able to create the Amazon Market Dominance Index (AMDI), which reflects Amazon’s market dominance compared to the entire German retail sector. The AMDI is calculated on a category-specific basis for Amazon’s ten main product categories. The semi-annual calculation of all AMDI values allows for growth-rate comparisons and the identification of seasonal effects. With the AMDI, we increase market transparency and provide data on Amazon’s market position that was previously unavailable. We help retailers with relevant and evidence-based insights that enable the identification of opportunities and risks in individual product categories.