4 Reasons Why Amazon Will Continue To Do Better Than Alibaba
There’s a war going on, in case you haven’t noticed. Don’t reach for your hard hat just yet, it’s a retail war. Not the one between online retailers and bricks and mortar stores, that was decided a long time ago. This is between two giants of the online world: Amazon and Ali Baba. Many people are predicting doom and gloom for the Seattle pace setters, but here are the reasons why Amazon will continue to do better than Alibaba.
The Excitement of the New
Do you remember when the United States was the land of unbridled consumerism, and China seemed a strange, far off place, held back by strict Communist ideologies. That cheese has moved. China have discovered capitalism, and now they’re showing the west how it should be done. At the forefront of this new Cultural Revolution is Alibaba.
Shock waves went round the world when Alibaba floated on the stock exchange for $21.8 billion. It was excitedly announced that this made it more valuable than both Amazon and Ebay put together, but is that really true? Many companies experience a big spike in share price in the initial days after being floated, especially when they’re as high profile as Alibaba. People want to get on board, and so the price soars. Over the next few months the price will stabilize, and then we’ll be able to get a true reflection of their value.
A Genuine Shopping Experience
Everyone loves shopping, and most consumers love a genuine shopping experience. This doesn’t mean they have to walk down the high street and into a store, online retailers can provide a meaningful experience too. Amazon understand this. Their websites are pleasing on the eye, easy to use, and you can deal with the company itself and buy directly from them. Alibaba, on the other hand, is more functional than esthetically pleasing. It acts as a portal, an international warehouse in effect for other retailers to get wholesale products from. For this reason, it has limited appeal to individual consumers, and lacks the human touch.
Amazon Understands America
The Chinese economy has been growing at a phenomenal rate, but there are signs that this could be slowing down. The fact remains that the US is still the world’s biggest economy, with China languishing in second. Alibaba is perfectly targeted for the Chinese market, but it bears little resemblance to sophisticated US websites such as Amazon.com. Amazon understand how marketing works today, and they use content marketing and social media to promote their range of services. This remains largely untapped by Alibaba, and could hand a decisive advantage to their rivals, if Amazon decided to take them on.
The Revenue Keeps Rolling In
Revenue is healthy for both companies. Alibaba made nearly $8 billion in 2013, but Amazon enjoyed sales of $74.45 billion. Amazon also has over three times as many employees as its Chinese rivals. This means they can be more flexible, and provide faster and better customer service. It’s easy to get hung up on the stock price, but for now and the foreseeable future, it seems that Amazon will be keeping Alibaba in its very big shadow.