Who is Winning the eCommerce War- Amazon or Alibaba

Who is Winning the eCommerce War- Amazon or Alibaba

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Amazon is growing to be the unrivaled undisputed leader in the eCommerce space.

Amazon, which is currently the largest eCommerce company in the world has a not very well know but huge competitor on the other side of the world- Alibaba. Although Alibaba’s market cap is much lower than that of Amazon, they have a diversified line of businesses that have a very strong foothold in China.

We thought it would be a good idea to compare everything there is to compare between Amazon and Alibaba and see how they stack up against each other- just to get an idea of which company is on a faster growth trajectory, and depict this in a very well detailed and illustrated infographic.

And here’s all the spicy data we found:

History

Today’s Amazon was founded as Cadabra in 1994 by founder Jeff Bezos. It was renamed later in 1995 as Amazon, the online bookstore.

Alibaba, on the other hand, had very humble beginnings- it was founded in 1999 by Jack Ma and his 17 other co-founders as a global wholesale marketplace in his apartment.

IPO

Amazon’s first IPO was held on May 15 in 1997. The shares debuted at $18 and raised $54 million for Amazon. The IPO gave it a market value of $438 million. USD 1000 worth of Amazon’s shares at the IPO are now worth $638,000

Alibaba’s IPO was held on September 19, 2014. The shares debuted at a cost of $92.70. The IPO raised 25 billion for Alibaba and gave it a market value of $231.44 billion. It was also the biggest IPO in the world at the time.

Services and products

Both Amazon and Alibaba have a long line of services and products. Besides the range of services and products with the Amazon tag, Amazon has also ventured into physical products (Alexa and Kindle being the notable ones), partner eCommerce business like Junglee.com, and even retail chains like Whole Foods.

Alibaba has also ventured out into everything from other ecommerce business, digital payment services (Alipay), and even cloud computing services.

Market Cap

Amazon is the undisputed leader in this respect. They have a market cap of 427 Billion, far beyond the market cap of Alibaba, which is 264.9 billion. However, both these figures are dwarfed by the market cap estimates of other tech giants like Apple (752 Billion) and Microsoft (507.5 Billion).

Employee Count

Amazon has a staggeringly huge employee base- 341,400. This is far beyond that of Alibaba, which is 50,092, and that of other tech giants like Apple (116,000) or Microsoft (114,000).

Major Shareholders

In Amazon’s case, Jeff Bezos is the major shareholder with 16.92% ownership of shares. Other major shareholders include the Vanguard Group, Blackrock Inc., Price T.Rowe Associates, FMR LLC and Capital World Investors.

Interestingly, the majority shareholder in the Alibaba group is Softbank with 32.4% of the stock, followed by Yahoo with 16.3%, and then Jack Ma with 7.8%.

Operating Countries

It goes without saying that Amazon is more spread over the world than Alibaba. With corporate offices, logistics and distribution centers all over the Americas, Asia, and Europe. It’s also the major ecommerce player in several countries.

Alibaba has a relatively lower number of corporate offices- they have centers in China, Taiwan, US, UK, Italy, France, India, and Australia. However, their logistics wing ships to almost everywhere- US, Canada, Belgium, Denmark, France, Germany, Italy, Netherlands, Norway, Spain, and the UK. They have suppliers and buyers in over 200 countries.

Percentage of main markets controlled

Amazon’s role in eCommerce growth in the US can’t be belittled. Amazon alone accounted for 53% of online sales growth in the US in 2016. This means that Amazon took 53 cents out of every new dollar Americans spent online. Apart from this, Amazon accounted for 3% of the total retail volume in the US.

Alibaba, however, is a much larger player in their home turf- China. The Alibaba group accounts for 11.18% of the total retail volume in China.

Direct traffic

Direct traffic is a very valid KPI that shows the size of the user bases of both the businesses.

Try-Shopify

Amazon.com has a whopping traffic of 2.2B per month. Alibaba’s traffic is split into its many online stores that include Taobao.com with a monthly volume of 497.60M, Tmall.com with 261.50M per month, Alibaba.com with 108.60M per month, and the well known Aliexpress.com with 633.90M per month. Alibaba Group’s traffic volume totals to 1.5B per month.

Active buyers

Amazon has a total of 310 million customer accounts and about 44% of them start product searches on Amazon itself.
When we take a look at demographics, there are 286 million internet users in the US in a population of 321 million. The shows that there is an internet penetration of 80% in the US.

On the other hand, Alibaba’s marketplaces have a total of 493 million monthly users as of December 2016, with 443 million active buyers. When we take a look at China’s demographics, China now has 731 million internet users in a population of 1.371 billion, which means that they have a 50% internet penetration.

Brand Trust metric

Forbes estimates the Brand Value of Amazon as 98.99 billion USD, and that of the Alibaba Group as 49.3 billion USD.

Also, Amazon is ahead of Alibaba in Market Value Ranking too: Amazon is #4 worldwide, and Alibaba is #12.

Growth Rate

The GMV or Gross Merchandise Volume growth is one of the most important KPIs that show commercial growth of a retail business.

Alibaba’s GMV figures are far ahead of that of Amazon. Over the past 4 years, from 2012 to 2016, Amazon’s GMV figures have grown from USD 61 billion to 136 billion.

Alibaba’s growth rates have been higher- they’ve grown from USD 171 billion in 2012 to about 547 billion in 2016.

Profits

Although GMV growth rates and volumes are significantly higher for Alibaba, profits are an entirely different story.
Amazon’s profit volumes have grown at much higher rates than Alibaba, as it can be seen in the infographic.

Innovations

Amazon is very well known as one of the most innovative companies in the eCommerce space. Their subscription service for expedited shipping and freebies, Amazon Prime, has 65 million paying members (it’s estimated that 60% of American customers are Prime members) who spend about 4.6-times more money on Amazon than non-Prime members.

Alibaba’s most important and famous innovation has to be Singles Day, an annual shopping holiday in China that they created. By several figures, it is the biggest shopping event in the world. Surprisingly, it’s almost thrice as big as Cyber Monday and Black Friday combined!

Apart from these, both Amazon and Alibaba have their own payment platforms. Pay With Amazon, Amazon’s new digital payment service has 33 million users. Alipay, Alibaba’s payment platform is the world’s largest mobile and online payment platform with 400 million users!

How the race will look like in 2020

The US Ecommerce Market is currently Pegged at $632 billion by 2020, where as the Chinese Ecommerce Market is Pegged at $1.7 Trillion. It’s clear from our stats that Amazon is stealing all the new customers who’re spending online in the US. Although Alibaba already accounts for more than 80% of all online purchases in China, with just a 53% internet penetration, there is still lot’s of room for growth.

While Amazon is much more innovative, Alibaba has huge growth potential in their own home turf.

Phew!

That was a lot to take in, wasn’t it?

We’ve depicted and illustrated all this data with all the stats in an infographic. Enjoy!

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