Amazon and Alibaba – Who is the winner?
Amazon and Alibaba, two giants of the e-commerce industry, are competing for the crown of global e-commerce market leadership.
Amazon laid the groundwork for an online bookstore in 1995, while Alibaba began operations in 1999, almost five years after Amazon was founded.
Now that both companies have a strong presence in their local areas, there is fierce competition between the two tech giants; Because they are looking for new markets to expand their business.
With an IPO of $ 21.8 billion at the end of 2014, Alibaba has grown to become one of the largest and most valuable e-commerce companies in the world. In fact, on the first day of trading, Alibaba overshadowed Amazon as well as eBay.
Both of these gods of e-commerce have many things in common. The bulk of Amazon’s revenue comes from electronic products and digital media products and content (including Amazon Prime, a cost-based annual subscription that distributes video content and other popular digital services).
Alibaba, on the other hand, operates a number of e-commerce sites targeting various vendors. One of Alibaba Group’s most profitable markets is Taobao, which accounts for more than 80% of Alibaba sales. Although the performance of both companies is similar at first glance, they are completely different.
Alibaba has no involvement in direct sales and, unlike Amazon, has no warehouse. They simply help small businesses and brand-owned manufacturers connect with consumers.
Amazon is working on a managed online platform that looks like a traditional store but is online. This controls the customer experience. Alibaba seems profitable, but the company faces many obstacles in finding new customers and adapting to new economies.
Amazon has already realized that in order to compete with Alibaba in China, they need to invest heavily to increase sales, diverting attention from China and focusing on other important areas.
Remember 1999, when a group of 18 friends and students, led by Jack Ma, ignored the exaggerations and set up Alibaba.com instead.
Initially established as a B2B market in China, it served businesses large and small exporting Chinese products globally; And became profitable only 3 years after its establishment.
Since then, Alibaba has grown steadily and widely. Although Jack Ma resigned as president, he had a very solid foundation; Alibaba’s current market value is over a quarter of a trillion dollars.
Alibaba Group is one of the largest online wholesale stores in the world. Overall, it is a Chinese multinational e-commerce superpower owned by Jack Ma, a Chinese businessman, investor, co-founder and former CEO of Alibaba Group. The reason for naming this company Alibaba is inspired by a legendary character named Alibaba in the legend of One Thousand and One Nights.
Many brands around the world fill their warehouses or online stores with products from this website. The company’s access to global markets, which has been the main priority of Alibaba managers, has resulted in half of the company’s total revenue coming from these markets, and Alibaba has become a global super company.
Alibaba’s field of activity is online store, retail system and cloud computing and today it has a variety of commercial companies around the world.
Alibaba Company has been operating in various fields since its establishment, such as e-commerce, payment systems, cloud services, artificial intelligence, etc. The company has invested about $ 1.7 billion in Indian startups since entering the Indian investment market in 2014, including Bigbasket and Zomato to Paytm, XpressBees.
But this store is not without problems. Some products are delivered to you in a way that bears no resemblance to their photo and not all suppliers have the same credibility. So how do we find our way through countless pages?
alibaba is a major store where you can buy the products you want on a large scale and is probably the largest online sales website in the world!
In this website, you can prepare the product you want if you negotiate with the seller and satisfy him. However, the main advantage of this website is the possibility of direct interaction with manufacturers. You will be able to take advantage of many discounts and design the products you want.
Alibaba has paved the way for retailers on other platforms and has now grown internet businesses as well as selling products on Amazon and other platforms.
Despite the huge growth of Internet businesses today, even many social network influencers, due to the power of their account and the amount of followers they have gained, provide products mainly from Alibaba and in social media platforms to They sell and this means a real internet business with a very high profit.
Amazon and a brief history
Whether you look at Jeff Bezos as a thinker or a villain, you can not deny that he has created one of the largest and most successful e-commerce markets in the world.
He started five years before Jack Ma, when he left his job as a vice president at a Wall Street company and began making plans for what is called Amazon.
Although Amazon initially started as an online bookstore, it quickly expanded to include almost every conceivable category. But Bezos did not stop there, buying Twitch, Whole Foods and more than 40 other subsidiaries totaling more than $ 500 billion.
Similarities between Amazon and Alibaba
In appearance, the two seem to be exactly the same. They are two e-commerce giants who enjoy the very low luxury of competitors. While their market share may vary by percentage (Amazon accounts for 39% of total US e-commerce sales, while Alibaba holds 58.2% of China’s total retail e-commerce stake), they They each dominate their respective countries where they started their work.
Both have proprietary payment systems: Amazon has Amazon Pay, which allows users to purchase items from non-Amazon sites with their Amazon accounts.
Alibaba has done the same with Alipay, with more than 700 million active users annually using its mobile and online payment system.
However, this is almost where the similarities end. Amazon and Alibaba have very different business models.
These two platforms are the largest e-commerce websites in the world. From an entrepreneurial point of view, we point out the major differences between the two.
Alibaba is basically a platform for wholesale sales of products in various categories, and Amazon is an online store for online businesses to sell their products.
Amazon is a store website and product sales platform that started in 1995 as an offline bookstore and then started selling new or used products online.
Amazon currently distributes a wide range of goods and products, ranging from books, CDs and DVDs, software packages to electronics and home appliances, bags, shoes and clothing, and today is the world’s largest online store.
Jeff Business is the founder and current CEO of the company.
In general, bulk purchase of products by examining the market as well as how to market and sell it from Alibaba at a reasonable price and creating a seller account and retail sales of the same product with a reasonable profit margin in Amazon. This is a business completely free of time and space.
In simpler words than Alibaba, buy the product cheaply in large quantities and sell it on Amazon
In the following, we intend to examine these differences in more detail:
Probably the biggest difference between Amazon and Alibaba is in those who target each of the online markets. Amazon sells new and second-hand goods directly to consumers, while Alibaba is an intermediary between buyers and sellers.
This does not mean that Alibaba does not have an Amazon-style offer, as they have both Ali Express and Taobao.
The second, in particular, is their largest and most profitable site, with nearly seven million active sellers in the market free of charge, stored goods (neither buyers nor sellers have to pay), which accounts for more than three-quarters of Alibaba’s sales. . But their business model is primarily B2B, while Amazon’s business model is B2C.
This is another key part where you will see the major difference between the two markets. It is well known that Amazon charges different sellers in return for being able to list products, whether through a monthly (professional) salesperson program, Amazon salesperson fees, Prime membership, or many other means.
Alibaba, on the other hand, does not have much of an additional cost limit, as evidenced by their free, Taobao site.
However, this is not a completely free experience, as they make money from sellers who pay to be seen higher in the site’s internal search engine. Amazon does not charge for this with SEO and metrics to make sellers better seen in search results.
Sources of income
Finally, we come to the third major difference between the two markets. The resources from which each company earns its revenue. Amazon combines online and offline stores (see Whole Foods) with revenue streams from well-known brands, individual retailers, subscription services and advertising.
They are also trying to dominate online streaming services – so is Alibaba – but have not yet made a significant profit that could be a major source of revenue.
Alibaba has made a name for itself by generating revenue from core business, digital media, entertainment and financial innovation.
Although they are moving into the world of online streaming like Amazon, they have not yet built a strong enough foundation to generate huge profits. But it only takes time to do this.
Products can be purchased at wholesale prices, then sold on platforms such as Amazon, eBay, Shopify, or even Instagram.
Entrepreneurs will be able to make more profit in sales due to lower prices of products.
The products in this platform are brandless and therefore entrepreneurs will be able to build their own brand.
You can sell your products on this platform, but usually these products do not belong to the same site.
If you do not own your own business but want to sell amazon products, you need to be added to this website; In this case, you will receive a commission for selling the product. However, entrepreneurs in this program, which is a kind of affiliate program, are not able to set their own personal price.
As a (affiliate) function, you can sell branded products in your online store.