When you think that most businesses are in a downturn during pandemics like COVID-19, there are still some out there that manage to survive and even then there are also certain companies that are flourishing. One particular category will be e-commerce, especially the giants like Alibaba and Amazon.
As people are unable to go out of their houses and are forced to be quarantined, one of the ways to satisfy your boredom will be to shop online and buy the things that you may or may not necessarily need.
When you talk about e-commerce names like Alibaba and Amazon are very synonymous with the word. Both these companies can be said to have conquered almost the whole market globally as we speak.
Even though both of these companies fall under the same category, if we were to analyze them carefully, there is still a distinct difference between the business model of both Amazon and Alibaba's companies.
Let us look at some of the differences and similarities between the companies and how they managed to become successful with their unique traits.
1. Business model
Let's have a look at Amazon first. Well, Amazon uses a business model where the sellers have to sell their products or services through the platform Amazon and the shipping is also done on the same platform.
Amazon prioritizes shipping effectively to satisfy its customers to the fullest. This model requires Amazon to have its very own warehouse to store all the shipments before arriving at the end customers.
Amazon controls its own logistics and tries to ship its customer's products as fast and as efficiently as possible probably way much better than all its competitors.
Whereas Alibaba does not have its very own warehouse instead the company only provides a platform to integrate the customers and sellers together without any logistics involved.
But what makes Alibaba rather unique is that a lot of small sellers use the platform established by Alibaba to promote their own products and services. Alibaba is considered the intermediary in the whole process.
If we were to look at it, Alibaba has two different platforms targeted at two different customers. The first platform introduced by Alibaba was Taobao
Originally, the platform Taobao was introduced to compete with E-bay at the time which was conquering the Chinese market. Aside from Taobao, Alibaba also has a different platform mainly for popular brands to do their business which is called Tmall.
A lot of big names used the platform Tmall and some of them include Nike, ZARA, Hugo Boss, and many more.
2. Customers' Data
When it comes to the similarities of both companies they have one thing in common which is both companies control their customers' data.
It can be seen that Amazon is much further ahead in collecting their customers' data because they control customer service. The seller only sells its products and services through Amazon.
The way Alibaba handles its customer's data is slightly different than Amazon in which customer service is only done between the seller and the customers alone. But overall Alibaba will still collect information regarding its customer's preferences when it comes to purchasing something through Alibaba.
Advertisements will also be provided to the sellers that wish to make their online shop much more well-known.
3. Technology
Technology is also an inherent part of any e-commerce website and that's why both of these companies have invested their money in the technology sector namely Alibaba Cloud and Amazon Web Services.
Currently, both companies are in a race and have invested billions of dollars to be the best companies out there in the world of e-commerce. We can definitely see that Amazon is much further ahead when it comes to market capitalization in which Amazon has achieved the trillion-dollar company whereas Alibaba is only half of that.
But who knows what might happen in the future as we all know Alibaba is not going to give up that easily.
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