In China, the big leader in retail is Alibaba, with Taobao. Alibaba Group plans to go public next year. experts estimate that the group may be valued at around $100 billion, (almost the value of Facebook). Alibaba is a privately owned Hangzhou-based group of Internet-based e-commerce businesses including Alibaba VS Amazon Comparison of two E-commerce leaders.
- BtoB online alibaba.com and, online retail and payment services
- a shopping search engine and data-centric services etao.com
- Taobao, the CTC leading website
- Tmall the BTC leading platform
Alibaba, the nation’s largest e-commerce group, reached 19.1 billion yuan “equivalent to all it had sold on last year’s Single’s Day” and about double what was sold last year on the US Cyber Monday “following Thanksgiving”.
At midnight, this figure had almost doubled to Rmb35bn ($5.7bn), the surest sign yet that China’s affinity with online shopping shows no sign of abating, with the country on track to overtake the US as the world’s largest market for e-commerce.
The day has also drawn the attention and commendation of China’s leadership as the nation attempts to rebalance its economy from one driven by investment to one driven by consumption.
“11.11 isn’t about numbers, it’s about fostering a healthier consumer environment,” Mr. Jack Ma founder of Alibaba.
The continued rapid growth of e-commerce in China contrasts with slowing online sales growth across much of western Europe and the US.
In 2013, revenue from online sales in China was between $190bn-$210bn, a close second to the American market, worth $220bn-$230bn, according to a survey conducted by McKinsey, and China’s market is growing much faster.
The company primarily operates in the People’s Republic of China, and in March 2013 was estimated by The Economist magazine to have a valuation between $55 billion to more than $120 billion
And while this valuation is a little more than half that of U.S. e-commerce leader Amazon.com, which has a market cap of $170 billion as of today, the Chinese online retail giant booked nearly double Amazon’s sales in 2012.
In 2012, 2 Alibaba’s portals together handled 1.1 trillion yuan ($170 billion) in sales, more than competitors eBay and Amazon.com combined.
The leaders of the two largest e-commerce markets in the world China and the USA already compete directly with each other in China, with Alibaba’s Taobao and Tmall marketplaces going head to head with Amazon.cn
Alibaba is expanding very fast, and by the billions, the two e-commerce giants no doubt will also compete in other markets, including the U.S.
About $59 billion in sales from sales of Amazon-owned merchandise. The US Platform has disclosed publicly that other retailers selling on its marketplace account for about 40% of the units sold on Amazon websites.
=> Amazon takes an average commission of 10% on sales by third-party sellers.
Amazon’s own sales totaled just over $55 billion and sales by marketplace sellers $37 billion (with Amazon taking a 10% cut and booking some $3.7 billion in revenue).
With this in mind, retail in China draws on company reports and its Top500Guide.com data to break down the similarities and differences between the two online retail giants.
One basic difference between the 2 giants is that Alibaba only provides an online shopping marketplace where other retailers sell and do not sell directly to customers. (via Twitter)
Amazon.cn both sells merchandise that it owns to customers and also operates a marketplace. The key metric to look at here to compare the marketplaces is gross merchandise value or the dollar value of all items sold on each platform.
Alibaba reported that the volume of transactions on its two marketplaces, Taobao and Tmall, was around $170 billion in 2012.
Amazon does not report it publicly. Instead, it reports total revenue, which was $61.09 billion in 2012.
These services are unrelated to consumer purchases, mainly Amazon Web Services, a business unit that rents data storage capacity and computing power to other companies. Amazon doesn’t disclose AWS revenue, but analysts estimate this at about $2 billion for 2012.
Chinese consumers use the web differently than U.S. netizens do.
“Compared with U.S. people, Chinese people prefer engaging with others through social media and mobile,” says Sun Baohong, a professor at the New York City campus of Beijing-based Cheung Kong Graduate School of Business.
As of the end of June 2013, there were 464 million mobile Internet users in China, according to the China Internet Network Information Center, three times the number in the U.S.
That would put Amazon’s 2012 GMV in the range of $92 billion, or just over half of all sales on Taobao.
Part of the reason that Alibaba is transacting at nearly double the amount online than Amazon is that the Chinese company is serving a much larger pool of online shoppers. As of the end of 2012, the U.S. had 254.3 million Internet users, and China more than doubled that at 571.1 million.
China has more room to increase its base of online shoppers, as only 42.3% of its internet population, compared with 81% of U.S. consumers.
The average ticket
Amazon and Alibaba tend to diverge on such key operating metrics as average order value.
The average ticket is $178 on Alibaba, while Amazon’s is a little higher at $220
In the past year, Taobao has expanded into many new categories, such as automobile and financial products, so its ticket price may increase in the future.
Amazon.cn has also been moving into more luxury categories, and its average sales amount may increase in the future.
Amazon’s top category is books and other media, such as music and videos. Media represented 30% of sales on Amazon’s sites. By contrast, the dominant category on Alibaba marketplaces is apparel and electronics, clothing, or cosmetics products.
In the recent Nov. 11 sales event in China, four of the top 10 sellers on Alibaba were apparel brands & mobiles.
In one area, these 2 e-commerce groups are moving on parallel tracks, and that is in mobile commerce.
Both recorded a similar percentage of sales from mobile devices in 2012
=>6.5% for Amazon (or $4 billion out of its $61 billion total, according to Top500Guide.com)
=>7% (or $12 billion out of $170 billion) for Alibaba
these percentages are moving up in China, with the low prices of smartphones.
In the recent Single-day sales event, 15% of Taobao’s sales came from mobile devices.
Amazon’s mobile sales will increase 100% to $8 billion in 2013.