These 5 key markets could help Amazon's international retail business explode

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  • Over the last few years, Amazon has launched retail operations in many international markets as the e-commerce giant continues to expand its global footprint.
  • According to RBC Capital Markets, these five countries could contribute more than $25 billion in sales to Amazon's retail business by 2023, and international retail growth could outstrip North America's by 2021.
  • The analysis led RBC to raise its long-term forecast for Amazon's 2021 revenue by about $5 billion to $406 billion.
  • Here's a breakdown of the five key international markets that could fuel Amazon's international expansion.
  • Visit the Markets Insider homepage for more stories.

Amazon dominates the US e-commerce market, and over the last few years the company has aggressively spread its footprint overseas.

The e-commerce giant has expanded into Turkey, Australia, Mexico, Brazil, and India all within the last few years, and RBC Capital Markets believes these five markets are crucial to Amazon's international ambitions.

According to RBC's analysis, sales across the five countries could account for more than $25 billion in revenue by 2023 with international retail growth outpacing North America's by 2021, which would be the first time that's happened since 2009.

"These five countries offer Amazon a very large, underpenetrated market opportunity," A team of analysts led by Mark Mahaney said in a note to clients. "We believe that investors may underappreciate the potential of these markets."

Amazon generated more than $65 billion in international revenue in 2018, compared to $124 billion in North America, according to RBC. Mahaney also said its "somewhat surprising" that international growth rates have been below those of North America, but the five markets mentioned in the report could help change that.

The findings led RBC to increase its 2021 revenue outlook for Amazon by about $5 billion to $406 billion.

Here's a breakdown of the five global markets, which are crucial for Amazon's international expansion:

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5. Turkey

5. Turkey

Amazon broke into Turkey's e-commerce market by launching its full marketplace operation in September 2018.

According to RBC's web tracking, Amazon is the second-most popular e-commerce site in Turkey in terms of traffic.

The firm estimates Amazon generated $35 million in sales in Turkey last year, and predicts that figure could jump to $345 million by 2023.

4. Brazil

4. Brazil

Amazon launched in Brazil in 2012 by selling Kindle and e-books online.

The company now offers 120,000 products across 15 different categories in Brazil, and Amazon has grown to become the third-most popular online retailer in the country according to RBC.

RBC estimates Amazon generated $107 million in sales in Brazil in 2018, and expects that figure to grow to $1.3 billion by 2023. Brazil's e-commerce market is expected to grow by 18% a year over the next five years driven by the proliferation of e-commerce platforms like Amazon, according to the firm's analysis.

3. Australia

3. Australia

RBC estimates Amazon hit $300 million in revenue in Australia last year, and predicts sales could increase to $2.4 billion by 2023.

Amazon is currently the second-most popular e-commerce site in Australia, according to the firm's report. The company entered Australia in 2009 through its Kindle product, and in December 2017 launched its Amazon MarketPlace.

2. Mexico

2. Mexico

Similar to Brazil, Amazon expanded into Mexico in 2013 by selling e-books on the Kindle store.

According to RBC's analysis, Amazon is the leading retailer in Mexico in terms of total online sales, and the firm estimates the company generated $500 million in revenue in the country last year. That figure is expected to swell to $2.9 billion by 2023, representing a 43% annual growth rate.

1. India

1. India

Amazon launched in India in 2013 with its Selling on Amazon and Fulfillment by Amazon programs.

According to RBC, India alone could represent at $18 billion revenue opportunity for Amazon. The firm's analysis projects that by 2023 India could for 13% of Amazon's international sales, and 4% of the company's total revenue.

RBC, citing data from Euromonitor, said Amazon claimed about a third of India's e-commerce market in 2018, trailing behind only Walmart, which took 44% market share.

"We believe that Amazon's ongoing investments in India will allow the company to take 35% (up from 30% in 2018, per Euromonitor) of India's Online Retail Sales," Mahaney said in a note to clients.

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