Summary of Key Points
In the latest Fortune Global 500 list, Amazon has for the first time surpassed Walmart to become the world's number one company, ending Walmart's 12-year reign at the top. The revenue gap between the two companies is minimal (Amazon: $717 billion vs Walmart: $713.2 billion), but there are significant differences in their growth momentum: Amazon has rapidly expanded through digital businesses such as e-commerce and cloud services, while Walmart relies on physical retail, which is limited by higher costs and slower expansion rates due to its offline operations. Additionally, retailers like Costco have maintained stable rankings, while Lloyds and Carrefour have seen slight improvements. The industry believes that future retail competition will focus on a "multi-channel ecosystem," with the integration of physical stores and e-commerce being the prevailing trend.
Detailed Analysis
1. The Change at the Top: How Did Amazon Overcome Walmart's 12-Year Dominance?
The direct reason Amazon was able to surpass Walmart is its slight lead in sales—Amazon's annual sales for 2025 amounted to $717 billion, compared to Walmart's total revenue for fiscal year 2026 (January 2025 to December 2026), which was $713.2 billion, a difference of only $3.8 billion. However, the more substantial factor is the difference in growth rates: Amazon's revenue has grown several times faster than Walmart's over the past few years. Walmart maintained its position at the top for 12 years thanks to its global network of physical stores, but Amazon's "light-asset expansion" strategy (which requires fewer stores and employees) allowed it to achieve leapfrog growth and ultimately overtake Walmart.
2. The Secrets Behind Revenue: Physical Retail vs. Digital Ecosystems—What Makes the Difference?
Walmart's revenue primarily comes from its physical supermarkets, selling goods such as food and daily necessities. However, this model has a significant drawback: high costs associated with renting stores, hiring employees, and maintaining supply chains, as well as the need to open new stores for expansion, which limits growth speed. Amazon, on the other hand, not only sells products online but also offers profitable cloud services (such as providing servers and data storage to businesses), which require fewer physical resources and result in faster growth with higher profit margins. For example, Walmart's adjusted operating profit was $31.1 billion, whereas Amazon's AWS (Amazon Web Services) has consistently been a lucrative business, providing strong momentum for its growth.
3. Other Retail Players: Stable Performance from Costco, with Slight Improvements for Lloyds and Carrefour
Other retailers in the list also deserve attention:
- Costco ranked 20th, unchanged from last year, thanks to its membership-based model (users pay an annual fee to shop, offering high-quality products at competitive prices), which has led to strong customer loyalty.
- Lloyds and Carrefour ranked 105th and 106th respectively, up from last year, possibly due to their efforts in integrating online and offline services (such as allowing customers to pick up orders in stores or receiving deliveries).
4. The Future Direction of Competition: A Multi-Channel Ecosystem—No More Confrontation Between Physical and Digital Retail
Industry experts argue that the competition between e-commerce and physical retail is no longer a zero-sum game; instead, it's moving towards a multi-channel approach. What does this mean? Simply put:
- Physical stores will not only sell products but also serve as "proximity warehouses" (small warehouses close to customers' homes, delivering orders within an hour).
- E-commerce platforms will also open physical experience stores (where customers can try on clothes before making purchases online).
Physical retail has core advantages, such as the ability to negotiate lower prices due to larger purchase volumes and the ability for customers to touch and pick up products immediately. As long as physical retailers can adapt to the trend of integrating online and offline services, they still have a promising future.
5. The Significance of This Ranking Change: Rapid Growth of E-commerce, but Not the End of Physical Retail
Amazon's surpassing of Walmart does not indicate that physical retail is on the decline; rather, it highlights the strong growth of digital businesses. However, physical retail offers unique experiences and immediacy that e-commerce cannot replace—for example, buying a bottle of soy sauce is more convenient by going to the supermarket directly rather than waiting for delivery. In the future retail market, those companies that successfully combine online efficiency with offline convenience will be the winners.
Conclusion
This change in rankings reflects the development of both e-commerce and physical retail: while e-commerce has risen rapidly through digital services, physical retailers can still maintain a significant presence by adapting to a multi-channel approach. The future of retail will see a blend of the two, leading to mutual growth and collaboration.