Intro: Amazon vs Alibaba | Which is Best for Manufacturers or Consumers?
The battle of Amazon vs Alibaba has begun. As ecommerce becomes ever more competitive, the biggest ecommerce companies have been founded, have grown incredibly, and have suddenly found themselves on the brink of direct competition with one another.
Competing Amazon reviews and Alibaba reviews are certain to appear. In this article, we hope to give a clear-eyed analysis of the Amazon/Alibaba divide.
Image Source: Pixabay.com
With vastly different business models, philosophies, and men at the helm of the two top all-encompassing ecommerce platforms, many are asking: What is the difference between Amazon/Alibaba?
To answer that question, we will look at a few different angles of the story of Alibaba vs Amazon.
Analyzing Alibaba vs Amazon Ecommerce
In this analysis of Amazon vs. Alibaba, we will cover the following topics:
- Alibaba vs Amazon ecommerce: What type of business model does each use?
- Amazon vs Alibaba: Who’s winning?
- Alibaba vs Amazon: Which is better for manufacturing companies and entrepreneurs?
- AliExpress vs Amazon: Which is better for consumers? And what do consumers need to know?
- What’s next: The future of Amazon vs Alibaba
So first, we’ll look into the way Amazon and Alibaba operate, and exactly what each website does.
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Alibaba vs. Amazon: Business Models
Alibaba reviews will tell you that Alibaba.com is a business-to-business (B2B) marketplace that connects businesses to Chinese factories. If a manufacturer wants to produce a new product, they can search on Alibaba for a suitable Chinese factory partner who will create their item, send a prototype, and then approve a large wholesale order.
Ironically, these goods often end up on the Amazon ecommerce platform, being sold to American customers. This is likely how most Americans know about Alibaba.
But Alibaba reviews and owns consumer-facing web properties as well. The Alibaba Group owns about a dozen related and affiliated ecommerce sites, two of which are Taobao Marketplace and Taobao Mall.
Taobao Marketplace is a C2C (consumer-to-consumer) marketplace (kind of like eBay, or an ecommerce version of craigslist classifieds), while Taobao Mall (or Tmall) is a B2C marketplace, like third-party sellers on the Amazon ecommerce site.
According to some estimates, these two Taobao properties alone make up over 80% of all online purchases in China. If you don’t believe it, consider this: Taobao is the #10-ranked website in the world.
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In a way, you can think of Alibaba as an eBay-type platform that also works for B2B wholesale needs. From Alibaba reviews found on the web, sellers love the platform, but Alibaba largely removes itself from anything beyond the connection and transaction between buyer and seller.
This is a big difference between Amazon vs Alibaba. Unlike Alibaba, Amazon provides all the services of an online retailer, but also lends significant support for sellers.
In the past few years, Amazon has become increasingly focused on logistics, which is backed up by Amazon reviews from sellers.
The company has reduced shipping costs and times, and encouraged sellers to buy into the FBA (Fulfillment By Amazon) program, in which sellers can store goods in Amazon ecommerce warehouses before selling them to allow for lightning-fast shipping to buyers.
In addition, Amazon has an additional (and lucrative) business model around its cloud computing platform called Amazon Web Services. Like Amazon, Alibaba has launched a similar service called AliCloud, but has yet to capture the market share of Amazon.
Image Source: Pixabay.com
Unlike Alibaba, Amazon has also become a major player in the streaming content wars, with Amazon Prime Video producing acclaimed original series, as well as offering streaming video content similar to that of Netflix.
Amazon also has a streaming audio content platform to rival the likes of Spotify or Pandora, keeping Amazon extremely competitive across multiple levels.
Plus, Amazon reviews of products are the trusted gold standard, and Amazon has the largest library of ebooks on the Kindle platform. The company sells millions of ebooks, many self-published, every month, and dishes out millions of dollars in royalty payments to authors on the platform.
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Amazon vs Alibaba: Who’s Winning?
In terms of performance, it is important to remember the differences between the platforms offered by Alibaba vs Amazon.
In the last fiscal year, Alibaba increased their revenue by 33%, resulting in a total of $15.7 billion. After opening with the biggest IPO in history, the market capitalization of Alibaba is currently over $260 billion.
While still less than Amazon, Alibaba employs roughly 36,000 workers and is looking to expand dramatically into the global market. But the stock performance has dragged, with a -0.012% drop as of May 2017.
How about those in charge of Alibaba vs Amazon? Alibaba founder and chairman Jack Ma has a current estimated wealth of $29 billion, making him the richest man in Asia. As a significant portion of his wealth, Ma currently owns approximately 7.8% of total Alibaba shares.
Amazon’s financials are very different. With a $473 billion market cap and $135 billion in revenue, one might think that Amazon ecommerce dwarfs Alibaba. So where’s the competition?
Well, despite the gap in revenue over Alibaba, the Amazon empire only turned a profit of $857 million, which is only about a fraction of what Alibaba does on much lower revenue.
Amazon ecommerce has never focused on profitability, instead attempting to snap up market share and provide the best possible experience for customers, even if it means a loss in potential profit.
Founder Jeff Bezos and his multitude of Amazon employees are playing the long game.
As Amazon reviews this strategy, it is obvious that it has paid off in recent months. Bezos added $27.6 billion, listing him in the top three richest people in the world, according to Forbes.
Worth over $72 billion, Bezos is behind only Bill Gates and Warren Buffett in total wealth.
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Alibaba vs Amazon: Which is Better for Manufacturing Companies & Sellers?
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Businesses using the internet to source manufacturers for their products will find no better online portal than Alibaba.com. Hands down.
But where Amazon vs Alibaba gets interesting is which platform is better for selling those goods.
Unlike Amazon, Alibaba and its B2C platforms like Tmall and others have a massive portion of the Chinese market. And the continued growth of AliExpress allows entrepreneurs and businesses to sell their products anywhere in the world.
In Alibaba reviews, it is often noted that it can be difficult to trust a manufacturer that you never meet face to face, especially with limited oversight from the Alibaba Group.
As we will see in the next section, Amazon is built to be the advocate for the consumer. They often seem to have little regard for the needs of sellers and manufacturers who use the platform.
Furthermore, some small businesses can see the rug pulled from under them when their products become too successful, especially as Amazon has essentially cloned certain products to sell for less under the AmazonBasics label. This can a big disadvantage for sellers considering Amazon vs Alibaba.
The retail giant even looks at its own Amazon reviews and enhances products based on customer feedback. Again, all of this is in keeping with the Amazon ecommerce commitment to providing the best products at the best prices for its customers.
But despite these aspects, the edge must go to Amazon. Unlike Alibaba, Amazon does not merely provide the web platform on which businesses can sell their products and find customers; for a fee, Amazon reviews and handles most of the fulfillment, storage, shipping, and customer service logistics that can cause huge headaches for small businesses.
For this reason, Amazon provides a more complete service to sellers and businesses, which gives the platform a competitive edge when considering Alibaba vs Amazon ecommerce.
Amazon vs AliExpress: Which is Better for Consumers?
CEO Jeff Bezos has made it his goal to make Amazon the ecommerce company that gets the best products for customers at the best prices — and with the best customer service and shipping times.
Looking at the competition between Amazon vs AliExpress, it is clear Bezos and co. will stop at almost nothing to do right by their customers.
This has often led to tension and alienation of suppliers and big brands, who feel taken advantage of by the ecommerce behemoth’s massive market share.
Amazon Reviews & AliExpress Reviews
When looking at Amazon reviews and AliExpress reviews from a consumer’s standpoint, there are certain characteristics that could play a substantial role in your decision-making process.
AliExpress often beats out Amazon in terms of price, but are their shoppers satisfied? What do consumers have to say about the Amazon/Alibaba divide?
AliExpress Reviews
Looking at AliExpress reviews from consumers is a bit of a mixed bag, but generally speaking, there are a few common issues that come into play. These include problems with shipping times, customer service, and overall quality/value.
For example, consumer AliExpress reviews on SiteJabber give the company an overall rating of 2 stars out of 5, with almost 70 percent of all reviewers awarding a 1-star rating.
On the other hand, AliExpress reviews on Influenster are slightly higher, with 3.5 stars. Many consumers who left positive reviews purchased jewelry or accessories, and some warned other shoppers to expect longer shipping times and lower quality as a sacrifice for cheaper prices.
Amazon Reviews
In comparison, Amazon reviews on SiteJabber are overwhelmingly positive. The company gets a total of 4.5 stars, with roughly 4 percent of customers giving a 1-star rating out of 5.
Where Amazon reviews really shine is through consumers with Amazon Prime memberships. With quick, guaranteed delivery, a forgiving return process, and overall high-quality items, many Amazon reviewers applaud Prime as the best feature of Amazon ecommerce.
That said, ConsumerAffairs gives the Amazon ecommerce marketplace a 2-star rating out of 5. Most Amazon reviews expressed frustration over poor customer service and packages arriving damaged or late.
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Conclusion: The Future of Alibaba vs Amazon
One thing is clear from the trajectory of these two companies, and the strong personalities that are firmly in charge of them: things will not remain static in the battle of Amazon vs Alibaba.
Both leaders have big plans in the works and hope to further revolutionize the world of commerce and beyond.
Amazon ecommerce is looking to branch out into Alibaba’s space and upstage the B2B aspects of Alibaba.com and also get the upper hand in the fight over Amazon vs AliExpress.
Amazon has a plan to implement a strategy called Global Supply Chain by Amazon, which will attempt to connect Chinese factories to the Fulfillment by Amazon Program.
In theory, this would make the transport of products produced in China seamless, making it just as easy to send something from China to the doorstep of an Amazon customer as it is to send from Columbus, Ohio. In contrast to Alibaba, Amazon has the experience and the capability to pull something like this off.
It’s an ambitious plan and would position Amazon ecommerce as a competitor not only to Alibaba in Asia, but also possibly UPS and FedEx, which must already be feeling uneasy about the percentage of their business that comes from shipping Amazon-labeled parcels.
If Amazon could pull off anything close to what it hopes to do, it could put a serious dent in Alibaba’s market share in China. The Amazon vs Alibaba war would certainly heat up.
If factories and sellers could outsource shipping, warehousing, and logistics to Amazon, it could make a compelling argument to leave the services of Alibaba behind.
Similar to Amazon, Alibaba has plans of its own as well. It has already created the largest PayPal clone in Asia called AliPay and has entered the worlds of cloud computing with Alibaba Cloud Computing and video entertainment with Alibaba Pictures Group.
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In contrast to Amazon, Alibaba has been able to expand into providing ecommerce pharmaceuticals and medical services under the name Ali Health.
Alibaba’s growth, however, has been hindered by ongoing concerns about counterfeit goods being sold on its sites, called out by Alibaba reviews on the site.
Another problem is that the lack of logistical solutions provides an interesting conundrum for the company. If a competitor like the Amazon ecommerce platform moves into Alibaba’s space and provides additional support or better functionality for retailers and manufacturers, the costs of switching platforms are fairly low for Alibaba users.
But in the case of Amazon ecommerce sellers, it is a big deal to move inventory, rework supply chains and determine how to warehouse and fulfill orders.
In the short to medium term, it looks like Amazon has a better plan for ecommerce world domination. But as in most online businesses, the advantage between Amazon vs Alibaba can change in a heartbeat.
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