Alibaba: Are They on the Radar to Become an Amazon Killer?
How many of you have heard of Amazon? Probably every single one of you. Heck, you have probably ordered something from them in the last 30 days. Now, how many of you have ever heard of Alibaba? Maybe only a few of you. The Alibaba Group is a Chinese e-commerce platform that is direct competition with Amazon. While both e-commerce businesses are showing year-over-year growth, Alibaba is nipping at Amazon’s heels.
When looking at both businesses, it’s a battle between Amazon owner, Jeff Bezos, and Alibaba owner, Jack Ma. Both basically have more money than God at this point but in a market where everyone is looking for the next big thing, will Amazon stay on top or will Jack and his team push full steam ahead in 2019 and close the gap between the online giants?
What is Alibaba?
Alibaba is a Chinese multinational conglomerate that operates in various sectors of the economy, with a primary focus on e-commerce and technology. It was founded by Jack Ma and his team in 1999. Alibaba’s business is quite diverse, encompassing several key areas:
- E-Commerce: Alibaba operates some of the world’s largest online marketplaces where businesses and consumers can buy and sell a wide range of products and services. The main platforms include:
- Taobao: A consumer-to-consumer (C2C) platform similar to eBay, where individuals and small businesses can list their products for sale.
- Tmall: A business-to-consumer (B2C) platform that hosts official brand stores and allows larger businesses to sell directly to consumers.
- Alibaba.com: A platform that connects buyers and sellers for international wholesale trade. It’s often used by businesses to source products in bulk.
- Cloud Computing: Alibaba Cloud, also known as Aliyun, provides cloud computing services, including data storage, computing power, and networking solutions, to businesses and individuals. It’s one of the leading cloud service providers in China and beyond.
- Digital Payments and Financial Services: While initially part of Alibaba, Ant Group (formerly known as Ant Financial) was separated from the company. Ant Group developed Alipay, a widely used digital payment platform in China similar to PayPal. It later expanded into offering various financial services, including wealth management, loans, and insurance.
- Logistics and Delivery: Cainiao Network, an affiliate of Alibaba, focuses on improving the efficiency of shipping and delivery for e-commerce businesses. It uses technology to optimize supply chain operations and improve the overall logistics ecosystem.
- Entertainment and Media: Alibaba Pictures Group is involved in film production, distribution, and related entertainment activities. It invests in the entertainment industry, including movies, TV shows, and digital media.
- Retail: Alibaba has also ventured into the offline retail space with initiatives like “New Retail.” This involves integrating online and offline shopping experiences through technologies like QR codes, mobile payments, and data analytics.
- Innovative Technologies: Alibaba invests in various cutting-edge technologies, including artificial intelligence (AI), machine learning, and big data analytics, to enhance its services and drive innovation.
- International Expansion: While Alibaba is based in China, it has made efforts to expand its presence globally by offering cross-border e-commerce services to facilitate trade between Chinese sellers and international buyers.
Brand Expansion Through Alibaba
Both Amazon and Alibaba have multiple services or brands under their umbrella. Obviously, we all know some of Amazon’s such as Amazon Prime, Amazon Fire, Amazon Fresh, Amazon Kindle, Amazon Drive, and others. Alibaba also has various brands such as Ant Financial, AliPay, Alibaba Cloud, 1688.com, AliExpress and more.
If you would take both businesses and put them on top of each other, they would almost fit identically. Yet, the opportunity for Alibaba to grow quickly exists simply by the numbers. China has around 731 million internet users while the US only has around 286 million.
Customer Shopping
Here in the US, we look forward to Amazon Prime Day. It’s a day where powerhouse Amazon has a huge sale on nearly their entire site it seems. People flock to the internet to see what deals are up and how much money they can save. It’s similar to a Black Friday or Cyber Monday event (which we will discuss shortly). The sales from this “shopping holiday” in 2018 was $4.19 billion for Amazon. Not bad, right? I mean, heck, any business who does $4.19 billion in sales in such a short period has nothing to complain about.
But wait… Alibaba has their own one-day sale in China called “Singles Day.” In that one day, they did $30.8 billion in sales. No, that’s not a mistake or typo. Can you say complete and udder annihilation in sales? There’s no comparison. If your jaw didn’t hit the floor, this probably will. Looking at the 2017 statistics for Black Friday and Cyber Monday sales in the US, the numbers only reached $10.6 billion (I didn’t have the 2018 figures at the time of writing this article). Add that to Prime Day and you’re still only at $14.25 billion. Alibaba is straight up a beast.
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