Ecommerce or electronic commerce is a system of distribution, purchase, sale and marketing of products or services that uses the Internet as the main medium of exchange. In other words, it is a business that manages payments and collections from the network. Which, thanks to its remarkable benefits, is becoming more fundamental in the digital world.
That is why, in ecommerce, people have seen a great opportunity to undertake and have a very successful commercial activity, since this way of doing business does not include barriers or borders, since the geographic space is not what determines the target. In fact, they enjoy the possibility of have a remarkable reach and thus reach all corners of the world.
Currently, one of the platforms with the greatest advantages to buy and sell online, without a doubt, are Amazon and Alibaba. Taking into account that, they are online stores that connect various providers of practically anything with countless online buyers. But, due to the boom that both platforms have, It is valuable to point out what each one offers and what its most powerful differences are..
What are all the products and services that Amazon offers as a company?
First of all, it is worth noting that Amazon is ranked as the most important online store worldwide, so is the most representative icon of electronic commerce and because of this, it is one of the online platforms most frequented by users from almost the entire planet. Which, was founded by Jeff Bezos and serves to buy practically anything, given that has a full catalog of products of all kinds and belonging to all sectors.
In addition to this, it is also worth noting that its origin dates back to 1994 when you opened your website with the name "Relentless.com" and a year later, I choose to change his ID and contract the popular domain "Amazon.com". Although, in principle, it focused on the marketing of books through the Internet, then the variety of the catalog offered to consumers began to increase and from there, its great success.
Now it is time to define what are the main products and services that Amazon provides to its customers as a company:
Cloud computing
Through "Amazon Web Services", this company provides a large collection of public cloud computing services and thus, together, forms a powerful cloud computing platform that is provided through the Internet. through the official Amazon website. Considering that Amazon Web Services (AWS), today, is the most complete cloud platform in the world and has been adopted by millions of users.
In such a way, provides more than 175 comprehensive data center services worldwide And because of its comprehensive set of global cloud-based products, it provides significant support to its users. Thus, it includes storage resources, for computing, databases, networks, analysis, mobile devices, security, business applications, IoT, tools for developers and administration.
Ecommerce
One of the main services that Amazon guarantees, consists of its electronic commerce platform from which offers products of all kinds to its customers worldwide. Considering that, due to its excessive success and quality as a company, it has been estimated as the king of ecommerce for many years, especially because it has been the pioneer of this kind of online commerce.
Among its main features, we distinguish that, through its e-commerce, Amazon bet on simplicity And with this, it optimizes the user experience in the search processes, as well as in the payment methods, the comparison and the review of reviews around the various products available. Apart from that, also guarantees innovation because it is a platform that, unlike many, has not focused on selling products for a single sector, but rather it is “the store of everything”.
VOD
Although it is true, video on demand is an OTT television service that consists of a modality of multimedia content diffusion that offers the user the possibility of access specific content at any time you want, to view it online. Thus, a solution that has evolved significantly over time and due to its advantages, has been adopted by Amazon.
In this sense, the VoD service of said company is known as "Amazon Prime Video" and it is based on a platform that provides thousands of titles at no additional cost to the monthly or annual price of the product. Regarding its operation, we highlight that can be used from any device and hosts dubbed and subtitled content in English, Spanish, French, Portuguese, and Italian for online viewing. But, if you want to enjoy them offline, you can easily download them to your computer or mobile device.
Smart speakers
To make matters worse, Amazon also supplies smart speakers to its users who are known as Echo speakers. Of which, there are different models with a variety of peculiarities that manage to adjust to the requirements of each person and are characterized by hosting the famous official voice assistant of Amazon, I mean, Alexa.
For its part, Amazon Echo speakers provide great sound quality in any of your presentations and this is one of the best advantages they provide. Apart from this, they have been designed to be used with high definition music services and the most important thing is that they are truly inexpensive gadgets compared to other solutions.
List of all products and services offered by Alibaba
Basically Alibaba is the largest retailer in China and thanks to its different benefits, currently is one of the most famous ecommerce platforms worldwide. Especially, because it consists of a mix between Amazon, PayPal, eBay and even Google, in view of the different services it provides to its users. Taking into account that, it has focused on connecting the millions of Chinese suppliers that have opted for this service with different online buyers from all over the world.
For its part, the present company was created by Jack Mac in 1999, by officially launching your website with the domain "Alibaba.com". Now, with respect to its operation, it is distinguished by having no inventory or participating in logistics such as storage, supply or shipping. Therefore, simply make a profit by receiving a fee for every transaction made and by charge subscription fees to sellers who want to access it.
Clarified all of the above, it is time to specify What are the main products and services provided by this Chinese-based e-commerce platform:
Ecommerce
Of course, the most primary service on Alibaba is associated with electronic commerce. In this sense, it has partnered with different Chinese and international companies that require inventory or manufacturers to offer all their products from said platform and, thus, perfectly assist the different buyers and sellers who choose to use this solution.
As we indicated previously, when you want to advertise on Alibaba, sellers have to pay a commission for each transaction made or pay a subscription fee to maintain your storefront and, in this way, the web obtains its profits without inventory or participation at the logistics level.
On the other hand, with respect to buyers, the platform allows sectioning all available products from various categories; keeping in mind that your directory is very simple to use and has a certain resemblance to eBay. In addition, it provides a utility called "FOB" (a modality widely used in international trade), which means that the seller will pay the costs associated with obtaining the product to the sea port, so the client must only pay for the transfer from that port to the final destination.
Cloud computing
Through its service known as Alibaba Cloud, this ecommerce platform also provides cloud computing services to online businesses and their own e-commerce ecosystem. Which are services that are available on a pay-as-you-go basis and add elastic computing, data storage and processing, like relational databases, anti-DDoS protection and networks.
It should be noted that the elastic computing offered by this service allows adding greater computing power together with load balancing and advanced network capabilities. In addition, its storage system offers the possibility of save unlimited data and objects, its database allows you to manage all the data you want with elastic, safe and reliable tools contained in Alibaba Cloud.
Web Hosting Solution
Apart from the above, Alibaba Cloud also provides web hosting solutions that they are ideal for any business environment, regardless of size. Since, Web Hosting Solution is responsible for offering complete assistance in order to reduce costs, maintenance and IT development at the same time as guarantees the stability and security of the site in question.
Thanks to that, Alibaba provides a fully resilient and robust infrastructure so that its users can provide their clients with a perfect experience and with that, they can greatly enhance their business. A clear example of this lies in the fact that, with this service, a US or international company you can start a website in China and get ICP support.
Amazon vs. Alibaba The Ultimate Comparison of Ecommerce Titans!
Due to their different strengths, today, both Amazon and Alibaba are considered the titans of the e-commerce world and, for that reason, it is valuable distinguish what are your most notable differences. Only in this way, it is possible to conclude which of the two platforms is better, depending on the requirements or expectations of each user.
Then, we mention and explain these most relevant differences:
Inventory
Based on direct sales, Amazon maintains a complete inventory in the company's large warehouse network and is in charge of constantly updating it. Aside from that, the service also provides a platform for other partner retailers to sell products to buyers, and those products have a higher purchase price, so Amazon can avoid slow inventory that he would only manage to break up the profits.
Instead, due to its business model, Alibaba acts as an intermediary between online buyers and sellers, therefore it works as a free market and does not manage its own inventory as such. Which helps you generate much higher margins.
Users
As it is a platform known worldwide for many years, Jeff Bezos ecommerce houses more than 310 million active customer accounts. Which continue to increase more and more.
However, due to the great boom that Alibaba has taken around the world, they are already over 443 million active buyers on said platform. This is mainly because China still has the largest user base globally.
Sales
On the other hand, regarding the sales of each e-commerce platform, we reveal that Amazon multiplies e-commerce sales by almost four and you also have extra revenue from cloud services and subscriptions far superior to those of the Asian company.
But, during the last semester of 2019, Amazon obtained profits of 2,600 million dollars, below the 2,800 million dollars that Alibaba managed to acquire as a net profit. Thus, a slightly higher sales margin compared to the Bezos platform.
So even though the amount of sales by Amazon exceeded 63.4 billion dollars and Alibaba only 16.7 billion dollars, the latter was able to obtain an operating result of $ 3.6 billion in front of $ 3.1 billion from Amazon.
Prices and offers
One of Alibaba's main objectives is focused on generating optimal benefits for sellers who use its platform. Whereby, provides better prices and higher offers so that any entrepreneur can quickly boost their business and position themselves in search rankings, without spending so much money.
This is because the Asian company does not sell its own products and therefore, it does not have to invest in inventory or storage. Which allows to acquire much higher profit margins; unlike Amazon, which is considered a more expensive solution to advertise.
In short, Alibaba can especially empower small and medium-sized businesses, providing them with a digital transformation solution so that they can start their online channel affordably. Instead, Amazon doesn't have this approach.
Variety of products
Regarding the catalog that these two platforms handle, Amazon has the lead compared to Alibaba. Since it is a much more varied service and, therefore, it has been classified as “The store of everything”. Which means that, users will be able to find an endless number of products that, even, not even available on the Asian platform.
Thus, the great peculiarity of Amazon is evident that has opted to encompass all the requirements of its users to offer optimal assistance. In addition to that it also has a high component of innovation.
Amazon sells more, but why does Alibaba have better net profit?
As we made you know in the previous part, Alibaba has a greater net profit compared to Amazon, despite the fact that the latter platform sells more items in general. Therefore, surely you are wondering what is so special about the Asian ecommerce in question? And then, due to the importance it reveals, in this section of the post we will indicate the reason for it.
In this sense, it is essential to highlight that Alibaba provides an online window to physical and / or electronic stores, just like Amazon. However, while the latter is committed to being the company that offers the products for sale, Alibaba simply is a common thread to establish contact between seller and buyer; therefore, it does not sell directly to the final consumer. Thus, it is considered up to six times more profitable than Amazon.
So, despite the fact that the company of Chinese origin invoices four times less than that of Jeff Bezos, the truth is that earn up to 32% more. Since, it has the ability to obtain 23% profit on sales made, mainly for its optimal cost structure which produces less expense. Instead, due to its own policies, Amazon has only achieved 4.2% profitability and therefore, it has a reduced net profit.
Consequently, even though both companies have tried to succeed in enemy territory, that is, Alibaba in the United States and Amazon in China, they certainly the first has been the winner in this battle. Well, for its advantages, it obtained a presence in the United States with an 80% market share, compared to the minimized 1% of Amazon in Chinese territory.