Amazon to overtake Walmart in beauty by 2025, says Morgan Stanley

Morgan Stanley projects that Amazon will become the biggest player in beauty

By Subrat Patnaik

From books to cloud computing, Amazon.com Inc. has gone on to dominate many segments over the years. Now Morgan Stanley projects that the e-commerce giant will become the biggest player in another space: beauty.
 

Amazon is set to overtake Walmart Inc. as the biggest US beauty retailer by 2025, analysts led by Simeon Gutman wrote in a research note. Amazon will make up about 14.5% of a market that could hit $180 billion in value by 2025, followed by the Bentonville, Arkansas-based retailer at about 13%. 

While grocery retailers still hold a leading share of about 29% of the US beauty market, their portion has shrunk over time with specialist retailers like Ulta Beauty Inc. and Sephora among the biggest beneficiaries. 

Amazon’s gains are set to come as the company continues to grow its share in the e-commerce market, set to account for 46.5% of it by 2025, Gutman wrote in the note. 

Amazon gained 0.6% on Tuesday, while Walmart slipped less than 1%. Amazon shares, which lost nearly half their value last year as routs ravaged technology and growth stocks, have rebounded this year to rise 50%. Meanwhile, Walmart shares have seen a relatively steadier growth curve over the past five years, and the stock is up 9.3% in 2023.

(Updates for market open throughout and adds details on Tuesday trading.)

--With assistance from James Cone and Katrina Lewis.