Amazon and Alibaba, the two big giants of the ecommerce industry are competing against each other to win the crown for the leader of the global ecommerce 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 IPO value of $21.8 billion 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, Alibaba eclipsed both Amazon and eBay.
The two ecommerce 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, Alibaba 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% 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 recognised 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.
The infographic below compiled by Ecommerce Platforms depicts the growth track of these two ecommerce giants.
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