Why is Alibaba a New Threat to Amazon?


How did Alibaba and Amazon start?

A dream of Jack Ma, which has taken place in the garage of a man in China is making its place in the world marketplace. His ambition is to make Alibaba a global leader in e-commerce to bring great success in China.

Jeffrey P. Bezos, the founder of Amazon, started his company by selling books on the internet in Seattle, to fulfill the demand of the people using the internet.

Now, the status of both companies.

With continuous setbacks and ups and downs, both the company has created its place in the world market. Amazon.com (AMZN) with generating a revenue of $930 billion is the current leader of the world’s e-commerce platform. Whereas, with a worth of $460 billion, Alibaba (BABA) is levitating up in the global market.

Why a threat?

Alibaba is continuously working on expanding its market in the world to sell products. In the present, Alibaba is operating in over 150 countries through its associate company, AliExpress. They sell goods from Chinese retail to other countries, which is why they are responsible for controlling the 80% e-commerce market in China. Amazon operates in 13, and now it is targeting to become the world’s fastest growing e-commerce company.

Alibaba is opening its product selling platform in countries like Russia, Italy, Turkey, and Spain to offer opportunities to the small and medium-sized enterprises. They are creating a simple way to sell the wares using the company’s platform. And they are further planning to expand into more countries after gaining experience. Allowing the small business to use the platform for selling its goods to the consumers will bring more revenue and customers to Alibaba.

Alibaba is also working on organizing financial services and banking relationships for the customers, which will enable them to invest and buy insurance by using Alibaba credit card.

Alibaba has created and maintained a strong presence in Asian countries and now their move in the west, particularly into the European market. The main reason for the expansion of Alibaba is to bring a lot of growth to overcome the decline in the Chinese market.

Amazon has to suffer some setbacks inĀ  China, as in July 2019, an Amazon store in China is in position to close down. This store has completed almost 15 years in China. This setback of Amazon in China is a sign of the presence of Alibaba and its continuous growth. It can be considered stress for Amazon as Alibaba is expanding globally with its international e-commerce businesses. It was Alibaba becomes the closest competitor of Amazon in the global e-commerce market.

The winner is yet to decide, and it cannot be predicted fully. Amazon is the current leader in the e-commerce platform, and Alibaba will keep on growing with a threat to other similar companies. Investors are also curious to know about the result, and they are betting on Alibaba that might grow up the shares of the company.


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