Amazon's (AMZN) CEO Jeff Bezos told investors that the company has exceeded 100M paid members globally and has shipped more than 5B items with Prime worldwide. The good news for the e-commerce giant may not end there, as Morgan Stanley analyst Brian Nowak told investors that his analysis shows that Amazon has gained 1.5% of U.S. apparel market share in 2017 and may achieve number one U.S. apparel market share in 2018 as Prime members and Millennials shift spending to Amazon and away from traditional brick and mortar retailers. 100M PAID MEMBERS: According to a regulatory filing, Amazon said that it has exceeded 100M paid Prime members globally 13 years post-launch. In 2017, Amazon shipped more than 5B items with Prime worldwide, and more new members joined Prime than in any previous year -- both worldwide and in the U.S., the company said, adding that members in the U.S. now receive unlimited free two-day shipping on over 100M different items. The company expanded Prime to Mexico, Singapore, the Netherlands, and Luxembourg, and introduced Business Prime Shipping in the U.S. and Germany. Additionally, CEO Jeff Bezos informed shareholders that Amazon Music now has tens of millions of paid customers, with Amazon Music Unlimited expanding to more than 30 new countries in 2017. GAINING APPAREL MARKET SHARE: In a research note to investors this morning, Morgan Stanley's Nowak said his analysis shows that Amazon gained 1.5% of U.S. apparel market share in 2017, largely at the expense of department stores. According to his work around Amazon's apparel gross merchandise value, the analyst estimates the e-commerce giant continues to be the second largest U.S. apparel retailer, trailing only Walmart (WMT), as the company has grown to about 7.9% of the overall U.S. apparel market, excluding shoes, or $21.1B apparel gross merchandise value. Further, Nowak told investors he expects Amazon to achieve the number one spot in 2018, as Prime members and Millennials shift spending to Amazon and away from traditional brick and mortar retailers. The analyst pointed out that Amazon's 2017 share gains look to have come largely at the expense of department stores, estimating Sears (SHLD), Macy's (M) and J.C. Penney (JCP) lost 0.8% share in 2017, with shareholding remaining roughly flat for Target (TGT) and Kohl's (KSS). L Brands (LB) lost share due to the elimination of its swimwear and apparel categories, he contended. Additionally, his U.S. apparel market deep-dive indicated that Walmart and Costco (COST) showed "impressive gains" despite a weak industry backdrop. Among the Softline retailers, Gap's (GPS) Old Navy, Ross Stores (ROSS) and Nordstrom's (JWN) Nordstrom Rack also added 10-15 bps of market share in 2017, he added. Nowak reiterated an Overweight rating and $1,550 price target on Amazon shares. PRICE ACTION: In morning trading, shares of Amazon have gained 2.4% to $1,564.90.
