Amazon AMZN announced its collaboration with Hyundai Motor Company at the 2023 Los Angeles Auto Show in a bid to enhance customer experience.
Notably, the partnership encompasses the launch of online sales of vehicles in the United States in 2024.
With this, Amazon strives to provide convenience and awareness to customers by allowing them to search for available vehicles, choose their preferred model and complete the purchase online with their preferred payment and financing options.
Further, the partnership also includes the deployment of an in-built Alexa experience in Hyundai’s upcoming vehicles. This will offer an enhanced virtual assistant experience to the customers purchasing Hyundai’s next-generation models.
The addition of Alexa will not only enable Hyundai customers to play music, set reminders, update to-do lists and check calendars, but also allow drivers to control their smart home from the road.
In addition, Hyundai has selected Amazon Web Services as its preferred cloud provider.
Amazon.com, Inc. Price and Consensus
The latest move marks AMZN’s strong step in the online car store space. This, in turn, will further solidify its presence in the booming e-commerce space.
Per an imarc report, the global online car buying market size is expected to reach $563.8 billion by 2028, exhibiting a CAGR of 11.1% between 2023 and 2028.
A Statista report indicates e-commerce market to reach $703 billion by 2028, witnessing a CAGR of 9.9% during the forecast period of 2023-2028.
The user penetration in the e-commerce market is expected to hit 43.1% in 2023 and reach 52.5% by 2028.
Strong prospects in these booming markets are expected to instill investor optimism in the stock.
Notably, shares of AMZN have gained 72.8% in the year-to-date period compared with the industry’s rise of 45.2%.
Strengthening Online Store Prospects
The latest partnership is in sync with this Zacks Rank #2 (Buy) company to capture a wider customer base through collaborative movements. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apart from this, Amazon recently partnered with Snap SNAP, allowing users to make product purchases directly from advertisements of its products on the Snapchat app.
The Amazon-Snap collaboration will enhance user experience by offering seamless access to Amazon product information within the Snapchat app.
AMZN’s collaboration with Meta Platforms META is another boost to the company’s online store sales.
Per the terms of the deal, Amazon can link customers’ Facebook and Instagram accounts to their Amazon accounts, allowing them to shop through Meta’s social apps.
Additionally, AMZN’s collaboration with Shopify SHOP remains noteworthy. On the back of this partnership, Amazon introduced the Buy with Prime app for Shopify, allowing Shopify merchants to manage their businesses with their inventory, pricing and promotions automatically synced in one place.
We believe that all the abovementioned endeavors will strengthen the online store sales in the near term.
Our model estimate for 2023 online store sales is pegged at $2.28 trillion, indicating growth of 3.8% from the prior-year quarter. The 2024 and 2025 online store revenues are pegged at $2.5 trillion and $2.76 trillion, indicating year-over-year growth of 9.9% and 10.1%, respectively.
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