Amazon overtakes Walmart to become biggest in US retail market

Walmart lags behind Amazon in the US retail market after the online retailer posted surprising financial results for the second quarter.

An unexpected rise in profit means Amazon has overtaken Walmart to become the largest retailer by market capitalisation in the US.

Shares in the online retailer jumped in aftermarket trading on Wall Street yesterday (July 23rd) after it posted quarterly results that surpassed analysts' expectations.

Revenue for the second quarter rose 20 per cent year-on-year to $23.2 billion (£14.9 billion) - exceeding the $22.4 billion average forecast that has been predicted by analysts, the Financial Times reports.

The surprising results pushed the company's value as high as $267 billion after shares rose 19 per cent after the closing bell on Wall Street. In contrast, Walmart's market valuation stood at $235 billion.

Operating income at Amazon jumped considerably - hitting $464 million in the second quarter of 2015, compared with an operating loss of $15 million in the same period 12 months earlier.

As well as its core online retail business, the company also offers Amazon Web Services - a cloud computing and hosting solution for businesses - and Amazon Prime Instant Video, a streaming service competing with Netflix.

Founder and chief executive Jeff Bezos hailed the series of milestones that Amazon has hit in 2015, including its launch in Mexico and the introduction of 350 new features for Amazon Web Services. He also highlighted the success of Prime Day, the first shopping event specifically for subscribes to the Amazon Prime, a premium delivery service. Special one-day offers during the event earlier this month helped Amazon break its Black Friday sales record, Mr Bezos said.

Amazon recently made Echo, a voice-powered personal assistant, available to the general public in the US following a successful trial period and the firm is reportedly looking to another form of technology as it continues to expand - drones.

Earlier this year it submitted plans to the US patent office that detail how it intends to use small unmanned aerial vehicles to deliver packages to customers, honing in on them using location data from their smartphone. However, it may have to convince authorities in the US and elsewhere that the services, named Prime Air, is safe before it can begin delivering goods in this way.

Amazon is also looking at other ways of getting parcels to consumers as quickly as possible. In Germany, it has partnered with Audi and DHL for a trial that sees DHL couriers given a digital code, granting them temporary access to the boot of a customer's car and enabling them to drop a parcel off even if the vehicle is locked.