Expect speed up of retailing disruption by Amazon

Expect continued disruption in the US retailing and consumer products sector caused by Amazon.com and possibly, China’s Alibaba, to speed up, says Sajal Kohli, a senior partner at McKinsey & Co. As sales go online, competing with the ecommerce giant poses a problem to many firms.

“This is no ordinary disruption,” Kohli told Association for Corporate Growth’s New York Annual Consumer and Retail Conference early in November

PE Hub reports that Kohli said the landscape may offer private equity plenty of opportunities for buyouts.

Competing with Amazon as sales go online is particularly difficult he noted.

Traditional consumer and packaged goods makers and retailers have been distressed as sales move online. “The industry is in turmoil,” Kohli said. He explained that’s why “You see this revolving door in management teams.

“We’re in an era of volatility.”

He pointed out that Amazon spent billions to build fulfillment centers that reach about 95 percent of the population in three hours with deliveries and continues to build infrastructure.

It’s also becoming a media company with Amazon Prime. “We spend a lot of time obsessing over them,” Kohli said.

Alibaba, which has been rumored to plan a major entry in the US market also remains a threat, he said.

PE Hub report.