Alibaba Vs Amazon: A Battle Of Two E-Commerce Giants

The Chinese Giant and the American Colossus find themselves at loggerheads, each determined to drive forward its own vision: a ‘pure’ marketplace on one hand; ‘retailer logic’ on the other.

Alibaba is often mistakenly thought of as ‘the Chinese Amazon’. It’s easy to see how people arrive at this description: after all, the two companies each dominate their respective primary markets. A quick look at the numbers for 2016 shows us that Amazon turned over $136bn, growing 27% on the year before; Alibaba is still much smaller, turning over $23bn – but it’s also growing twice as fast, earning 56% more in revenues in 2016 than in 2015. In that year, Amazon had 310m customers to Alibaba’s 454m – most of whom are in China.

The Distributor vs The Marketplace

But beyond these figures, the two companies follow notably different business models.

Amazon makes the bulk of its revenue on items from its own inventory. “Amazon buys and resells stock: it’s retailer logic”, explains Yves Martin, director of analysts Wavestone and a specialist in mass consumption.

And though income from third-party sales via its marketplace are now nudging 50% of Amazon’s revenues, it retains close control over these via Fulfilment by Amazon, which allows other sellers using its platform to store stock in its warehouses. “In the fourth quarter of 2016, FBA units represented over 55% of total...Continue reading here: https://roobykon.com/blog/posts/67-alibaba-vs-amazon-a-battle-of-two-e-commerce-giants

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