Amazon's Explosive E-Commerce Growth Could Accelerate Further

Amazon's (NASDAQ: AMZN) e-commerce sales are skyrocketing, but they are still being held back by fulfillment constraints. As the company ramps up capacity, it's likely to report a further acceleration in e-commerce growth. Here's why.

Amazon's e-commerce business continued to hum along in 2019, growing about 15%. Growth picked up in the latter half thanks to the company's investments upgrading the free shipping that comes with Amazon Prime from two-day delivery to one day. As Prime members noticed that they could receive more of their orders the very next day, they naturally ordered more items more frequently.

But things really began to heat up last March when the coronavirus struck in a big way in the U.S. As communities shut down and more people sheltered at home, they turned online for more of their needs. Amazon was so overwhelmed by the sudden surge in demand, it prioritized only essential items. It hired 175,000 workers to help keep up, and actively tried to discourage demand by dialing back advertising. What normally took one or two days to arrive often took longer than a week during this time.

Source Fool.com