What is your take on the topic of this article “Alibaba vs Amazon”. The online marketplace and online stores communities continue to grow every day. Some might find it surprising but personally I do not find this development surprising at all. The truth is more and more people now find and prefer purchasing online.
Most companies have seen this development and have now embraced the benefits of having both online store and brick and mortar stores to their various establishments. This is done to meet up with the demands of the ever-expanding consumer community. Now there are lots of online marketplaces on the internet today. But of all the numerous marketplaces we have online some are actually better than others in terms of services.
Alibaba vs Amazon
Amazon and Alibaba are arguably the two best online marketplaces in the world today. If one is to give a name to the best online marketplace in the world it should be one of these two. These two platforms are direct competitors. This is because their business models are similar but the same. Amazon is the biggest marketplace platform in America while Alibaba is the biggest in China. These two companies are both big brands in their respected home bases, but who do you think gets the nod when it comes to external and new territories. For this, the competition is therefore fierce.
Alibaba Business Model
Alibaba main business model resembles that of eBay. It serves as a middleman between buyers and sellers. This online marketplace platform connects buyers and sellers. It, therefore, does not sell products directly to consumers, unlike amazon. It operates through a network of sites to meet up with its business.
This platform is free for both buyers and sellers. You do not get charged to list items on the platform. Although there are paid services on the platform. Users of Taobao, which is the platforms largest site lets its users pay to rank higher on the sites internal search engine. Taobao is the branch for smaller merchants. Tmall is the branch for large and well-known brands across the globe like Nike, Apple, and others.
Other platforms of Alibaba include Alipay, AliExpress and others. Now one would question the means through which Alibaba generates revenue. Well, this platform generates revenue through annual user fees, sales commission, and advertising revenue.
Amazon Business Model
This platform is often hyped as the best marketplace in the world. This is due to the fact that it was before Alibaba. The company, unlike Alibaba, sell goods directly to its users. Products and goods on this platform are always available for purchase and shipping. It does not only sell directly to its users. It also provides a platform for users mainly retailers to sell their products to buyers. The items sold by retailers on the Amazon platform are higher in terms of prices and are sometimes less common.
Amazon does not charge its users to list items on the platform but does retain a slice of the sales price in the form of commission. Amazon also offers paid services to its users via its amazon prime service. On this service, users pay annually to secure two days free or same-day shipping on eligible items. You can also stream media like music and videos. Other ways through which amazon generates revenue is through selling its e-reader, kindle