Soon after the world's largest Internet retailer
) announced its intention to get into the wine-selling business,
Wine.com, one of the leading online wine retailers made a similar
announcement. The latter is slated to launch an online platform
-- Wine.com Marketplace, which will let smaller wineries sell
Wine.com started its business in 1998 and is based in San
Francisco, CA. The company has used technology to its advantage
by launching applications for iPads and iPhones. This along with
its free shipping service has helped it build relationships with
a large number of sellers, which has in turn built something of a
position in the online wine selling business.
Amazon's initial focus is on consumers in Napa Valley,
California. Wine.com is a well-established player in the space,
so its experience with the supply chain is of great value.
hence making it cheaper for the small vineyards.
However, with 100.4 million monthly unique online visitors,
Amazon should not be written off, far ahead of its closest rivals
), which gets 47.5 million visitors and
), which gets 41.4 million visitors every month.
According to a study conducted by MarketResearch.com, the U.S.
wine market is expected to touch $33.5 billion with 871 million
gallons of wine sales by 2013. The study forecasts that wine
shipments will expand at a CAGR of over 3% from 2010to 2013.
Amazon is one of the leading players in the extremely
fast-growing retail ecommerce market and its strength lies in its
huge scale of offerings, its broad reach and platform
Amazon's third quarter revenue was $13.81 billion, up 7.6%
sequentially and 26.9% from the year-ago quarter. This was better
than the guidance for the quarter of $12.9-$14.3 billion (up 6.0%
sequentially, or up 25.0% year over year at the mid-point) and
more or less in line with consensus expectations. Year-over-year
revenue growth was 30% excluding unfavorable currency impact.
Currently, Amazon has a Zacks #4 Rank, which implies a Sell
rating in the near term.
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