Ecommerce: A Comparison of Strategies between Amazon and Alibaba

This article compares the strategies of Amazon and Alibaba in the ecommerce market. It discusses the customer-centric approach of Amazon and the investment strategy of Alibaba. It also highlights the importance of Amazon Prime and the online presence of both companies.

Running head: E-COMMERCE
Ecommerce
Nam of the Student:
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Author’s Note:

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The 21st century is the era of changes and modern scientific advancements. In short, we
can say that this is the time of competition and the companies all over the world are trying to win
this battle by some or the other means. This is the age of online retail sales and the customers can
find it really easy to shop via the online shopping sites. One of the issues that are arising in the
modern scenario is the growing popularity of Amazon. The growing popularity of Amazon is
attracting a major portion of the customers to shop from them. This is becoming one of the
major concerns for the other retail firms is that they might have to give in to the power and the
popularity of Amazon (Heinemann & Wenzel 2018).
It must be noted that the customers are paying much less attention to the physical stores
as they are getting a good range of products in the online sites of Amazon. As per the opinion of
Chiu et al., (2014), Alibaba is making huge investments in the markets that are located outside
China or US. This is indeed one of the innovative and interest idea as it helps them to gather a
huge amount of new ideas that are not that common in the US. Their main aim is to connect the
Chinese products to the rest of the world.
On the other hand, Amazon has not invested such huge amounts in the companies located
in the places outside the USA. The main concern of Amazon is to make sure that they are
capable of investing majorlyin globalizing or internationalizing their marketplace. It has to be
noted that Amazon is not really interested in making any minority investments in places outside
the US. Therefore it can be said that in the context of diversification and innovation in the
Global market Alibaba is trying to go ahead than Amazon. Wang, Wang & Liu, (2016) is of the
opinion that Amazon uses the strategy of acquiring whereas Alibaba uses the strategy of
investing. So, Alibaba has been able to take a minority stake in companies outside the US in

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comparison to Amazon. On the other hand, Amazon has been able to acquire 5times number of
companies than Alibaba.
One of the best approaches that can be taken by these online sites is to make the shopping
experience much easier and smooth for the users. It has been seen that the users usually find it
easier to shop on the Amazon sites as it is customer-centric. This is one of the best strategies that
are used by Amazon (Thakur & Srivastav, 2015). It really very user-friendly and it gives a free,
someplace and straightforward shopping place for the customers. However, at the same time,
eBay which is another e-commerce site following a seller-centric approach. They usually try to
bring in to focus on a large number of sellers who might have a wide range of the same product.
So, it is an obvious fact that the customers will like to buy the products from Amazon as it is
really very smooth and easier for them.
The other important strategy that is used by Amazon in order to boost the online strategy
is indeed a very good and innovative one. Einav et al., (2014) has suggested that the option if
Amazon prime logo is indeed very important for getting the attention of the customers. The
Amazon prime subscribers are eligible to get a large number of facilities.
The customers might not like to shop from other e-commerce sites as they will not get
these benefits. Shang et al., (2017) is of the opinion that Amazon is still capable of marking their
presence felt within a large number of customers all over the world. Though Alibaba tries to
develop a very innovative and large number of contacts even outside the US, it is seen that
Amazon is way ahead of it. Amazon is still spread over a large number of areas than Alibaba. In
the year 2016, Amazon alone took about 53 percent of every dollar that was spent by the

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American buyers on the transactions. About 3 percent of the total retail volume in the US was
contributed by Amazon.
On the other hand, one cannot overlook the brilliant performance that is being given by Alibaba.
Though they are doing a good job it is only being done in their home country or their turf
country that is in China. They mainly contribute to 1.5 percent of the total online sales volume.
It is also seen that the internet penetration of Amazon is much more than that of Alibaba.
Internet penetration by Alibaba is about 50 percent whereas then internet penetration of Amazon
is about 80percent. There are about 493 million users that use Alibaba for their online purchases
as was seen in the year 2016 December. Among them, 443 are active buyers. On the other hand,
there are about 310 million users who use Amazon for their purchases. However, in this context,
it has to be noted that the population of China is much more than that of US. Provided the total
population of China, it can be said that The number of active users for Amazon in the US is
much more in comparison to the number of active online purchasers in China (Liu & Tang,
2018).
Therefore, it can be said that the strategies that have been adopted by Amazon are helping
them to get a strong boost. It has to be noted in this context that both Amazon and Alibaba have
been focusing on their flagship strategy but Alibaba has a small number of services than that of
Amazon. Alibaba suffers from the fact that they have fewer services with less consistent
branding. However, on the other hand, it is seen that Amazon has a large number of goods and
services that too with constant branding. However, it has to be noted that Alibaba has a larger
number of main markets in China than in comparison to Amazon. At the same time, it is needless
to say that on an International basis, Amazon has a control over a large number of shops.

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Amazon has not only tries its level best to maintain a steady branding but at the same time they
have tries hard to add a lot of details. These details and precision play a huge role in boosting up
Amazon as one of the strong e-commerce sites (Brownell, Gerard & McCuller, 2018). Alibaba
has also tried their level best to work over the product diversification and customer satisfaction
but majority of their focus only on their home country that is China. Therefore, in order to boost
up their online presence, they have to widen their area of operation.
As far as the present scenario is concerned, Amazon seems to be at a very high position
in comparison to the other competitors like Alibaba and eBay. It is mainly because of the fact at
Amazon has always made intelligent choices and decisions. Amazon also makes rich content of
its products which is totally absent in eBay and Alibaba. Both these companies have to adopt
some and the other strategies like these so that they can develop a strong hold over the online
markets. It will be interesting to see all these companies giving each other a very strong fight but
it seems that Amazon has a lot of strong points to win over the e-commerce markets.

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References
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Appendices

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