AMAZON VS ALIBABA

               

                   AMAZON VS ALIBABA                                                Amazon and Alibaba the two big giants of

     The e-commerce industry
are competing against each other to win
the crown for the leader of the global
e-commerce market
amazon laid the cornerstone in 1995 as
an online bookstore
whereas Alibaba started off its venture
in 1999.
nearly five years after amazon's
founding now that both the companies
have established a strong brand presence
in their home territories.

There is tough competition between these
two tech giants as they are looking for
new markets to expand in
by raising an  value of 21.8 billion
dollars by the end of 2014
Alibaba has grown on to become one of
the largest and most valuable ecommerce
companies in the world

In fact on the first day of trading Ali
baba eclipsed both amazon and e bay
the two e-commerce titans have many
features in common
a major portion of amazon's revenue
comes from electronic products and
merchandise and digital media content
including amazon prime an annual fee
based subscription
that streams video content and other
trending digital services
on the other hand Ali baba operates on a
number of ecommerce sites aimed at
different types of sellers.

Alibaba's Taobao is one of Alibaba
group's most profitable marketplaces
and is responsible for more than 80
percent of Alibaba's sales
even though the mode of operation of
both companies looks similar at first
glance
they are quite different Alibaba isn't
involved in direct sales and does not
own any warehouses like amazon
they simply help small businesses and
branded manufacturers reach consumers
amazon operates on a managed online
platform that looks similar to a
traditional store
but stays online it exercises control
over customer experience.

Alibaba looks profitable but the company
is facing strong barriers in finding new
customers and adapting to new economies
amazon has already recognized the fact
that to compete with Alibaba in china
they need to invest a huge amount of
money to increase sales
and has pivoted away from china to focus
on other prominent regions.

Alibaba a brief history remember in 1999
when the whole world seemed to be in a
tizzy about y2k
well a group of 18 friends and students
led by jack ma
ignored the hype and instead founded
alibaba.com
it originally started as a china-based
b2b marketplace that catered to small
and big businesses exporting Chinese
products globally
becoming profitable just three years
after being founded
since then Alibaba has steadily and
widely grown
although jack ma stepped down as the
chairman he had built a very solid
foundation
with Alibaba's current market value at
more than a quarter trillion united
states.

Dollars amazon a brief history whether
you view Jeff Bezos as a mastermind or
villain
there's no denying he's built up one of
the largest and most successful
e-commerce marketplaces in the whole
world
he got his start five years earlier than
jack ma did when he quit his job as a 
at a wall street firm
and started drawing up plans for what
would eventually be called
amazon although amazon originally
started as an
online bookstore it rapidly expanded to
include just about every category
imaginable but Bezos didn't stop there
also acquiring twitch
whole foods and more than 40 other
subsidiaries with a value of more than
500 billion dollars all in all
similarities between amazon and Alibaba
on the surface.

The two seem to share quite a bit in
common they're two ecommerce behemoths
who enjoy the luxury of very few
competitors
while their market shares may be
different percentages amazon owns 39
of all U.S ecommerce sales while Alibaba
owns 58.2 percent of all retail
e-commerce shares in china
they each dominate their respective
countries in which they began
both also have proprietary payment
systems amazon has amazon pay
which allows users to purchase items on
non-amazon sites with their amazon
accounts.

Alibaba has done the same with Alipay
with more than 700 million annual active
users
employing its mobile and online payment
system however that's pretty much where
the similarities end amazon and Alibaba
have very different business models from
each other.

So let's jump into what those are so you
can see for yourself which would suit
you better as an online seller
difference one target audience who each
online marketplace targets is probably
the biggest difference between amazon
and Alibaba.

Amazon sells directly to consumers for
both new and used items
while Alibaba is a middleman between
buyers and sellers
that's not to say that Alibaba doesn't
have an amazon style offering as they
have both Ali Express and Taobao
the latter in particular is their
largest and most profitable site
with almost seven million active sellers
stocking items on the fee free
marketplace
neither buyers nor sellers have to pay
fees that contribute more than three
quarters of Alibaba's sales
but their business model is primarily
b2b well
amazon's is b2c difference too
fees this is another key area where
you'll notice major differences between
the two marketplaces
it's well known that amazon charges
sellers various fees in exchange
for being able to list products whether
it's through the monthly
professional seller plan amazon seller
fees prime memberships or many other
ways.

Alibaba on the other hand doesn't have
quite a tight hold on charging fees as
evidenced by their fee free Taobao site
it's not a totally free experience
though as they generate revenue from
sellers paying to rank higher on
Taobao's internal search.

Amazon doesn't charge for this with say o
and metrics being the top ways sellers
rise in search results
difference three revenue sources lastly
we come to the third major difference
between the two marketplaces
the sources where each company derives
its revenue from
amazon has a combination of online and
offline stores.

See whole foods with their revenue
sources coming from big name brands
individual sellers subscription services
and advertising
they're also trying to establish
dominance in online streaming services
so is Alibaba but they haven't yet made
the kind of profits that can count as a
major source of revenue.

Alibaba has carved out its own niche by
getting their revenue from core commerce
digital media
entertainment and funding innovation
although they too
are diving into the online streaming
world like amazon
they haven't yet built a strong enough
foundation to bring in big profits
but we'd bet ten to one that it's only a
matter of time before they do
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