On the surface, they appear to have a great deal in common. They’re two e-commerce behemoths with a small number of competitors. While their market shares are different numbers (Amazon owns 39 percent of all US eCommerce sales, while Alibaba owns 58.2 percent of all retail eCommerce shares in China), they both dominate the countries they started. You can Go Now to the Amazon website to know more.
Both companies have their payment systems: Amazon has Amazon Pay, allowing users to utilize their Amazon accounts to make purchases on non-Amazon sites. Alibaba has done the same with Alipay, which has more than 700 million yearly active users and accepts payments via mobile and web.
However, there aren’t many parallels between the two. Amazon and Alibaba have quite distinct business methods, so let’s look at what they are and see which one would be better for you as an online vendor.
Key points about Amazon and Alibaba
- Target Audience
The most significant distinction between Amazon and Alibaba is arguably who each online marketplace caters to. Amazon offers new and used things directly to customers, whereas Alibaba acts as an intermediary between buyers and sellers.
That isn’t to suggest Alibaba doesn’t have an Amazon-style offering, as AliExpress and Taobao are both available. The latter is their most significant and most profitable site, with nearly seven million active vendors stocking things on the fee-free marketplace (neither customers nor sellers pay fees), accounting for more than three-quarters of Alibaba’s sales. On the other hand, their business model is predominantly B2B, whereas Amazon’s is B2C.
- Fees
You’ll find significant disparities between the two marketplaces in this area. Amazon is well-known for charging sellers a variety of fees in exchange for the ability to advertise products, whether through the monthly (professional) seller plan, Amazon seller fees, Prime memberships, or a variety of other methods.
On the other hand, Alibaba has a loose grip on charging fees, as seen by their fee-free Taobao website. However, it is not a completely free experience since they make money by charging vendors to rank higher on Taobao’s internal search. Amazon doesn’t charge for this, and SEO and analytics are the most common strategies for sellers to improve their search rankings.
- Sources of Income
Finally, we come to the third main distinction between the two marketplaces: the revenue sources used by each organization. Amazon operates online and offline stores (see Whole Foods), with big-name brands, individual sellers, subscription services, and advertising as revenue sources. They’re also vying for domination in online streaming services, as does Alibaba, but they haven’t yet produced enough money to justify it as a key source of revenue.
Alibaba has carved out a distinct niche by generating money from core commerce, digital media, entertainment, and innovation investment. Even though they, like Amazon, are entering the internet streaming industry, they have yet to establish a strong enough base to generate significant revenues. But we’d wager a ten-to-one chance that it’ll only be a matter of time before they do. Alibaba is a Chinese e-commerce platform that dominates the consumer retail market. They do not own the inventory of the products they offer; instead, they serve as a conduit between buyers and sellers. On the other hand, Amazon is a re-seller that owns its inventory and supply chain and sells directly to the buyer.
