Amazon vs Alibaba What is the best e-commerce portal to buy and sell online?
Amazon and Alibaba, the two giants of the eCommerce industry are competing against each other but who is winning? What are differences between amazon vs Alibaba
Ecommerce or electronic commerce is a system of distribution, purchase, sale, and marketing of products or services that uses the Internet as the main medium of exchange.
Learn what are difference between Amazon vs Apple.
In other words, it is a business that manages payments and collections from the network. Which, thanks to its remarkable benefits, is increasingly essential in the digital world.
That is why, in ecommerce, people have seen a great opportunity to undertake and have their own highly successful commercial activity , since this way of doing business does not include barriers or borders, since geographic space is not the one that determines the target.
In fact, they enjoy the possibility of having a remarkable reach and thus reach all corners of the world.
Currently, one of the platforms with the greatest advantages for buying and selling online, without a doubt, are Amazon and Alibaba .
Taking into account that, they are online stores that connect various providers of practically anything with countless online buyers. But, due to the boom that both platforms have, it is valuable to point out what each one offers and what are its most powerful differences.
Amazon vs Alibaba-What are all the products and services that Amazon offers as a company?
First of all, it is appropriate to note that Amazon is ranked as the most important online store worldwide, making it the most representative icon of electronic commerce and due to this, it is one of the online platforms most frequented by users of almost all the planet.
Which was founded by Jeff Bezos and serves to buy practically anything, given that it has a catalog full of products of all kinds and belonging to all sectors?
In addition to this, it is also worth noting that its origin dates back to 1994 when it opened its website with the name “Relentless.com” and a year later, I choose to change its identity and contract the popular domain “Amazon.com“.
Although in principle, it focused on the marketing of books through the Internet, then the variety of the catalog offered to consumers began to increase, and from there, its great success.
Now, it is time to define what are the main products and services that Amazon provides to its customers as a company :
Cloud computing
Through “Amazon Web Services”, this company provides a large collection of public cloud computing services and thus, together, forms a powerful cloud computing platform that is provided through the Internet through the official website of Amazon. Considering that Amazon Web Services (AWS), today, is the most complete cloud platform in the world and has been adopted by millions of users.
In this way, it provides more than 175 comprehensive data center services worldwide and, due to its wide set of global cloud-based products, provides important assistance to its users. Thus, it includes storage resources, for computing, databases, networks, analysis, mobile devices, security, business applications, IoT, tools for developers and administration.
Ecommerce
One of the main services that Amazon guarantees consists of its electronic commerce platform, from which it offers products of all kinds to its customers worldwide . Considering that, due to its excessive success and quality as a company, it has been considered as the king of ecommerce for many years, especially because it has been the pioneer of this kind of online commerce.
Among its main features, we distinguish that, through its e-commerce, Amazon bets on simplicity and with it, optimizes the user experience in search processes, as well as in payment methods, comparison and review of reviews around the various products available. Apart from this, it also guarantees innovation because it is a platform that, unlike many, has not focused on selling products for a single sector, but rather is “the store for everything” .
VOD
Although it is true, video on demand is an OTT television service that consists of a modality for broadcasting multimedia content that offers the user the possibility of accessing specific content at any time they wish, to view it online . Thus, a solution that has evolved significantly over time and due to its advantages, has been adopted by Amazon.
In this sense, the VoD service of said company is known as “Amazon Prime Video” and is based on a platform that provides thousands of titles at no additional cost to the monthly or annual price of the product. Regarding its operation, we highlight that it can be used from any device and houses dubbed and subtitled content in English, Spanish, French, Portuguese and Italian to view them online. But, if you want to enjoy them offline , you can easily download them to your computer or mobile device.
Smart speakers
To make matters worse, Amazon also provides smart speakers to its users who are known as “Echo speakers”. Of which, there are different models with a variety of particularities that manage to adjust to the requirements of each person and are characterized by hosting the famous official voice assistant of Amazon, that is, Alexa.
For its part, Amazon Echo speakers provide great sound quality in any of your presentations and this is one of the best advantages they provide. Apart from this, they have been designed to be used with high definition music services and most importantly, they are truly inexpensive devices compared to other solutions .
List of all products and services offered by Alibaba
Basically, Alibaba is the largest retailer in China, and, thanks to its different benefits, it is currently one of the most famous e-commerce platforms worldwide. Especially, because it consists of a mix between Amazon, PayPal, eBay, and even Google, in view of the different services it provides to its users. Taking into account that, it has focused on connecting the millions of Chinese suppliers that have opted for this service with different online buyers from all over the world.
For its part, this company was created by Jack Mac in 1999, through the official launch of its website with the domain “Alibaba.com“. Now, with respect to its operation, it is distinguished by having no inventory or participating in logistics such as storage, supply, or shipping. As a result, you simply make a profit by receiving a fee for each transaction made and by charging subscription fees to sellers who want to access it.
Having clarified all of the above, it is time to specify what are the main products and services provided by this Chinese-based electronic commerce platform :
Ecommerce
Of course, Alibaba’s most primary service is associated with e-commerce . In this sense, it has partnered with different Chinese and international companies that require inventory or manufacturers to offer all their products from this platform and, with this, perfectly assist the different buyers and sellers who choose to use this solution.
As we indicated before, when wanting to advertise on Alibaba, sellers have to pay a commission for each transaction made or pay a subscription fee to maintain their showcase, and in this way, the website makes its profits without inventory or participation to logistics level.
On the other hand, with respect to buyers, the platform allows sectioning all available products from various categories ; keeping in mind that your directory is very simple to use and has a certain resemblance to eBay. In addition, it provides a utility called “FOB” (a modality widely used in international trade), which means that the seller will pay the costs associated with obtaining the product to the sea port, so the client should only pay for the transfer from said port to the final destination.
Cloud computing
Through its service known as “Alibaba Cloud” , this ecommerce platform also provides cloud computing services to online companies and their own e-commerce ecosystem. These are services that are available on a pay-per-use basis and add elastic computing, data storage and processing , as well as relational databases, anti-DDoS protection and networks .
It should be noted that the elastic computing offered by this service allows adding greater computing power together with load balancing and advanced network capabilities. In addition, its storage system offers the possibility of saving unlimited data and objects, its database allows you to manage all the data you want with elastic, safe, and reliable tools contained in Alibaba Cloud.
Web Hosting Solution
Apart from the above, Alibaba Cloud also provides web hosting solutions that are ideal for any business environment, regardless of size. Web Hosting Solution is responsible for offering complete assistance in order to reduce costs, maintenance, and IT development while guaranteeing the stability and security of the site in question.
Thanks to that, Alibaba provides a totally resistant and robust infrastructure so that its users can provide their clients with a perfect experience, and with that, they can enhance their business to a great extent. A clear example of this is that, with this service, a US or international company can start a website in China and obtain ICP support.
Amazon vs. Alibaba The Ultimate Comparison of Ecommerce Titans!
Due to their different strengths, today, both Amazon and Alibaba are considered the titans of the e-commerce world and, for that reason, it is valuable to distinguish what are their most notable differences. Only in this way, it is possible to conclude which of the two platforms is better, depending on the requirements or expectations of each user.
Below, we mention and explain these most relevant differences :
Inventory
Based on direct sales, Amazon maintains a complete inventory in the company’s large warehouse network and is constantly updating it. Aside from that, the service also provides a platform for other partner retailers to sell products to buyers, and those products have a higher purchase price, allowing Amazon to avoid slow inventory that would only break up profits.
Instead, due to its business model, Alibaba acts as an intermediary between online buyers and sellers, so it functions as a free market and does not manage its own inventory as such . Which helps you generate much higher margins.
Users
As a platform known worldwide for many years, Jeff Bezos’ ecommerce houses more than 310 million active customer accounts . Which continue to increase more and more.
However, due to the great boom that Alibaba has taken worldwide, there are already more than 443 million active buyers on said platform. This is mainly because China still has the largest user base globally.
Sales
On the other hand, with respect to the sales of each e-commerce platform, we reveal that Amazon multiplies by almost four the sales of e-commerce and also has an extra income for cloud services and subscriptions much higher than those of the Asian company. .
But, during the last semester of 2019, Amazon made profits of $ 2.6 billion, below the $ 2.8 billion that Alibaba managed to acquire as a net profit . Thus, a slightly higher sales margin compared to the Bezos platform.
So, although the amount of sales by Amazon exceeded $ 63.4 billion and Alibaba only $ 16.7 billion , the latter was able to obtain an operating result of $ 3.6 billion compared to Amazon’s $ 3.1 billion .
Prices and offers
One of Alibaba’s main objectives is focused on generating optimal benefits for sellers who use its platform. Therefore, it provides better prices and higher offers so that any entrepreneur can quickly boost their business and position themselves in search rankings, without spending so much money.
This is because the Asian company does not sell its own products and therefore, it does not have to invest in inventory or storage. Which allows to acquire much higher profit margins; unlike Amazon, which is considered a more expensive solution to advertise.
In short, Alibaba can especially empower small and medium-sized businesses, providing them with a digital transformation solution so that they can start their online channel in an affordable way . Instead, Amazon doesn’t have this approach .
Variety of products
With respect to the catalog that these two platforms handle, Amazon has the lead compared to Alibaba. Since, it is a much more varied service and, therefore, it has been classified as “the store of everything” . Which means that users will be able to find an endless number of products that are not even available on the Asian platform .
Thus, it is evident the great peculiarity of Amazon that has opted to encompass all the requirements of its users to offer optimal assistance . In addition to that it also has a high component of innovation.
Amazon sells more but why does Alibaba have better net profit?
As we made you know in the previous part, Alibaba has a higher net profit compared to Amazon, despite the fact that the latter platform sells more items in general. Therefore, surely you are wondering what is so special about the Asian ecommerce in question and then, due to the importance it reveals, in this section of the post we will indicate the reason for it.
In this sense, it is essential to highlight that Alibaba provides an online window to physical and / or electronic stores, just like Amazon. However, while the latter is committed to being the company that offers the products for sale, Alibaba is simply a common thread for establishing contact between seller and buyer ; therefore, it does not sell directly to the final consumer. Thus, it is considered up to six times more profitable than Amazon .
So, despite the fact that the company of Chinese origin invoices four times less than that of Jeff Bezos, the truth is that it earns up to 32% more . Since, it has the ability to obtain 23% profit on sales made, mainly due to its optimal cost structure that produces fewer expenses. On the other hand, due to its own policies, Amazon has only achieved a 4.2% profitability and therefore, it has a reduced net profit.
Consequently, even though both companies have tried to succeed in enemy territory, that is, Alibaba in the United States and Amazon in China, the former has certainly been the winner in this battle. Because of its advantages, it obtained a presence in the United States with an 80% market share, compared to Amazon’s minimized 1% in Chinese territory.
So now you have understood what are the difference between Amazon vs Alibaba.
If you have any questions, leave them in the comments, we will answer you as soon as possible, and I’m sure it will be of great help to more members of the community. Thank you! 😉
