Compare E-Commerce Platforms, Amazon VS. Alibaba

E-Commerce or electronic commerce continues to grow, therefore, Compare E-Commerce Platforms can be such as helpful things to choose which is suit for you. Both small or large companies have embraced the advantage of combining internet-based storefronts and additional physical locations to meet consumers’ needs.

Some electronic giants in the market, however, such as Alibaba (BABA) and Amazon (AMZN) have become leading players. While Alibaba and Amazon are purely E-Commerce since each has different features, their business models are very different.

Now that a strong brand presence has built-in their home regions by both companies, there is intense competition between the two tech giants as they seek new markets to thrive on. Amazon is a wholesale retailer of used and new goods, Alibaba operas as an intermediary between sellers and buyers.

Compare E-Commerce Platforms Amazon and Alibaba Similarities 

The two seem to have very little in common on the surface. They are two E-Commerce giants that have few competitors. But, their market share may be a different percentage. Each of them dominates the country in which they started.

The proprietary payments system also belongs to them. Amazon pay of Amazon allows users to purchase items with their Amazon accounts on non-Amazon sites. Alibaba has Alipay with over 700 million annual active users using online and mobile payment systems.

But, that is where their similarities end. Both Alibaba and Amazon have very different business models. So let’s go over that business model so can understand which one is meet your need as an online seller.

Amazon’s Business Model

Often called the world’s largest online retailer, a business model with many moving parts is operated by Amazon. First, goods are sold directly by the company. Percentage of products offered with a small markup to shoppers via Amazon’s online storefront.

And the company’s large warehouse is keeping inventory. Most consumers assuming the products are cheaper and available for purchase delivery. A platform to sell products from retailers to buyers also provided by Amazon. Usually, less common items are sold through Amazon’s partner retailers.

Or Amazon is allowed to avoid slow-moving inventory storage by those with a higher purchase price that could reduce profit. While the cost to list items for sale does not assess by Amazon for its retails partners, a portion of the sales price is retained by it as commission.

Through it, Amazon prime service, a subscription-based business model also maintained by Amazon like a small electronic product line. Customers pay an annual fee under a prime account to get same day or two days of free shipping on eligible items.

And they also can access streaming media such as movies or digital music. Amazon also gets income from sales of kindle, e-reader, and purchases of mobile apps and e-books offered to kindle owners, these can be important things to Compare E-Commerce.

Alibaba’s Business Model

Just as American consumers recognize Amazon as an E-Commerce giant, Alibaba dominates China’s E-Commerce market. Although a unique business model used by the company, Alibaba’s core business is similar to that of eBay.

Alibaba acts as an intermediary between sellers and buyers online and through its website that has an extensive network, it facilitates the two parties to do the sale of goods. Taobao, the largest site, operates as a fee – free marketplace where to do complete transactions, neither buyers nor sellers are charged a fee. 

In contrast, merchants on Taobao pay to rank higher on the site. Generating ad revenue for Alibaba that mimics Google’s core business model. While the majority of the seller who takes advantage of Taobao’s are small traders, space for larger retailers also provided by Alibaba.

An E-Commerce site operated and owned by Alibaba is called Tmall that serves well – known brands, including NKE (Nike), GPS (gap), and AAPL (Apple). Although a fraction of the number of active sellers registered on Taobao is belongs to Tmall, income can be generated by Alibaba from deposit.

And also from sales commission applied to the retailers and annual users fees. To address customer concern over the validity and security of transactions completed online, Alipay is created by Alibaba. It acts as a secure payment system which gives the buyer a protect if the seller refuses or unable to deliver the foods sold.

Difference 1 (Audiens Target)

Who is each other’s online target market is perhaps the biggest difference between Alibaba and Amazon. For used and new goods, Amazon sells them directly, while Alibaba is an intermediary between sellers and buyers.

It’s noted that Alibaba doesn’t have like what style Amazon have to Compare E-Commerce Platforms, because they own Taobao and AliExpress. In particular, is their most profitable and larger size, with nearly seven million sellers actively stocking goods on the free of charge market.

Difference 2 (Fees)

Here you will notice big differences between them. It is known that sellers are charged for various fees in exchange by Amazon to be able to list products, whether that be via prime membership, Amazon seller fees, a monthly seller plan, or any other means.

On the other hand, Alibaba does not have strict restrictions on charging fees, as evidence by free charges by the Taobao site. These are not completely free experiences, as revenue is generated by them from seller payments to get a higher rank on their internal search. 

Difference 3 (Revenue Sources)

Last is the income derived by each company from a source. Amazon has a combination of online and online stores. With major brands as their source of revenue, subscription services, retailers, advertising, and services.

They try to become the most dominant in online streaming services – and so is Alibaba – but they are yet to get a quantifiable advantage as a major revenue source. Alibaba has made its niche by gaining revenue from digital media, corE-Commerce, funding innovation, and entertainment.

While they have also jumped into the world of online streaming, like Amazon, they haven’t built a strong foundation enough to make huge profits. But, it might just a problem with time before they do.

Both Amazon and Alibaba are still unique from each other. In terms of oligopoly, when considering their significant market share to Compare E-Commerce Platforms, you need to identify the market condition of the companies.