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E-commerce continues to grow, but the online shopping boom is starting to fade, which is not good news for Amazon

The US Department of Commerce reported on Tuesday (May 18) that e-commerce sales of Amazon and traditional retailers such as Wal-Mart increased by 39% compared with the first quarter of the same period last year. This was the fastest increase since the second quarter of last year, when sales increased by 44%. Before the pandemic, the growth rate of e-commerce sales was about 15%.

This is especially noteworthy considering that towards the end of the quarter, the supply of vaccines is becoming more widespread and the control of the pandemic is clearly loosened. In addition, by then, people may have thought that their needs for certain goods purchased online have been met.

There are signs that people’s enthusiasm for online shopping has begun to weaken. Wal-Mart said in its earnings report on Tuesday (May 18) that in the first fiscal quarter ended April 30, its e-commerce sales increased by 37% over the same period last year. This is a major improvement, but it is far from the 69% e-commerce growth in the fourth quarter of last year. Also on Tuesday, Home Depot said that in the first fiscal quarter ended May 2, its online sales increased by 27% over the same period last year, compared with an 83% increase in the fourth quarter.

To some extent, these slower growth rates reflect the fact that April 2020 was included in the comparative period, when the new crown crisis first triggered a surge in online shopping. To make up for this shortcoming, both Wal-Mart and Home Depot emphasized that their e-commerce sales and overall sales have increased significantly in the past two years.

This seems reasonable, but the use of this indicator also acknowledges that there are huge concerns that online sales growth will not only slow to the pre-pandemic speed, but will also slow down further. This seems to be a real risk.

After all, neither the e-commerce sales report of the Ministry of Commerce nor the reports of Wal-Mart, Home Depot or other retailers reflect how profound the environment has changed recently. For example, in the past week, the number of new coronavirus cases reported every day was about half of April. As more people are fully vaccinated, vaccinations are opened for children 12 years and older, and restrictions are relaxed, more Americans will feel at ease when they return to the store.

This is not bad news for Wal-Mart and Home Depot. After all, they have many physical stores. But for online retailers such as Amazon, the prospect of people spending less time shopping on the couch is almost unwelcome. (by tiktooky