Amazon is a giant in the online selling world, but who are its biggest competitors? Some new contenders are giving Amazon a run for its money. Please keep reading to discover who they are and what makes them a threat.
Who Are Amazon's Competitors, And Why?
eBay is a massive eCommerce platform that competes directly with Amazon for online sales. While eBay's revenue has fallen recently, the company saw its best net revenue since 2013 in 2020—$10.2 billion.
Retailers list products on eBay and customers buy them in the marketplace. You'll also find eBay sellers selling products similar to those sold by amazon retailers. The main distinction is that eBay sellers can either auction their items or use a fixed rate.
It also outperforms all other Amazon competitors regarding website visits, averaging over one billion monthly visits.
Jack Ma founded Alibaba Group in 1999, a Chinese multinational corporation with numerous subsidiaries, the most notable of which are Alibaba.com, Taobao, Tmall, and AliExpress.
Alibaba.com, a B2B (business-to-business) marketplace, is the Alibaba Group's flagship subsidiary. For retailers looking to buy in bulk and resell for a profit, it competes with Amazon. In addition, Alibaba.com gives businesses direct access to manufacturers of various goods, allowing them to avoid go-betweens and save money on unit pricing.
B2C (business-to-consumer) e-commerce platforms include Taobao, Tmall, and AliExpress. These companies compete with Amazon by selling low-cost electronics, clothing, accessories, and gadgets.
Collectively, the Alibaba Group brought in revenue of $31.14 billion in Q3 2021, an increase of 29% year over year.
Walmart is a global retailing behemoth, operating over 11,000 physical department stores in 27 countries. It competes in various locations with Amazon's retail subsidiaries (such as Whole Foods and Amazon Books), offering a diverse range of products at everyday low prices.
While Amazon dominates the eCommerce space, Walmart is rapidly expanding its online presence. Consumers prefer shopping for groceries and essential items on Walmart.com, which leverages thousands of physical Walmart stores across the US to offer familiar brands and easy pickup/returns, according to Jungle Scout's 2021 Ecommerce Report.
Walmart expects global eCommerce revenue of $75 billion in 2021, up $35.3 billion from the previous year.
How Amazon Has Managed To Stay Ahead Of The Competition
An Obsession with Consumers
Amazon provides its customers with greater ease of use than other retail e-commerce websites. Superior search and query capabilities, recommendations based on previous purchases, one-click ordering at checkout, multiple consumer reviews, ratings, and dash buttons for automatic re-ordering are essential differentiators. Furthermore, Amazon has a 360-degree view of its customers with Prime membership. Purchase frequency, data on online transactions, entertainment preferences, and regional demographics are all included. All of this allows Amazon to personalize its online experience for its customers while also experimenting with and improving its functionality.
Highly Competitive Pricing
Lower pricing is a crucial advantage driving its Marketplace program and multiple supplier options. Amazon has consistently prioritized growth and "customer value" over short-term profits. It has also taken advantage of economies of scale and investments in infrastructure and logistics, which have enabled it to offer two-day delivery capabilities and one-hour delivery on a significant subset of 25,000 items in 30 cities through Prime Now. Its highly profitable $10 billion AWS business could also help it subsidize growth into more appealing but lower-margin areas such as online grocery.
Fewer Technology and Organizational Silos
Amazon's most important advantage is that it is a 20-year-old company, skipping generations of legacy technologies that hold back today's retailers. Instead, Amazon moves to the cloud with AWS, free of investments in mainframes, inflexible and expensive relational technology, and acquisitions in massive data centers. Instead, it focused on what its customers required, developed innovative technology solutions in-house, and then commercialized them. It also grew organically, avoiding the enormous costs of M&A-induced technology integration or having an online business in Silicon Valley that ran independently from its retail division!
What Could Cause Amazon To Lose Its Dominant Market Position
Inflexible Hybrid Cloud
Suppose AWS loses cloud market share over the next few years. In that case, I believe it will be due to consumer perceptions of not offering the most competitive hybrid cloud services in a world where the demand for hybrid cloud is rapidly rising.
The fact that Amazon would be fair and founded is irrelevant. The mere threat of increased regulatory ire directed at AWS could harm the company's long-term market share prospects by instilling fear, uncertainty, and doubt in buyers and driving them away.
Growing Adoption of Alternative Cloud
Growth in the alternative cloud market would, of course, harm Azure and Google Cloud. However, it would fall heaviest on AWS, as it is regarded as the largest of the Big Three cloud providers and the one buyers are most likely to try to avoid if they want to avoid the traditional public cloud computing market.
The Potential Impact Of Amazon's Competitors On The Retail Industry
The Amazon Effect refers to the significant disruption eCommerce has caused in the retail market. The term arose due to similar companies to Amazon's dominance in the eCommerce market and its leadership in the industry's disruptive impact. Numerous studies, including an in-depth Harvard study by Alberto Cavallo, have extensively researched the effect. The Amazon Effect has been discovered to cause various changes in the retail market. Among the products are greater price flexibility and uniform pricing in traditional brick-and-mortar stores. In addition, pass-through inflation has decreased due to increased price flexibility and consistent pricing.
Various other studies have also revealed that the Amazon Effect has compelled retail malls and offline retailers to create an experience centered on offline shopping to divert business from eCommerce. It has been discovered that eCommerce has forced retailers to increase their use of technology to make offline shopping more convenient and faster.
You cannot compete with Amazon in some ways (or Walmart or Alibaba). Online retailers thrive by providing a large selection at low prices. You will lose money if you try to match or beat their prices. So instead, concentrate on ways to engage your audience (which may overlap with Amazon's at times) in ways that online companies cannot.
Connect The Online And Offline Shopping Experiences With Mobile
Mobile is one of your best tools for bridging the physical and virtual worlds. An increasing number of shoppers are using smartphones to conduct online searches. They can browse large sites of companies like Amazon, but the experience can be overwhelming. While you may not have as many options, you can provide a more focused and personalized shopping experience.
Be Active In Your Community
As online retailers such as Amazon expand, there is a shift toward in-person shopping. There are social, economic, and environmental reasons why patronizing a local business is preferable to a large global one. Make the most of this phenomenon by acting like a local business. This goes beyond local SEO and marketing, which are both critical. It also entails being actively involved in your community.
Amazon is the reigning king of online retail, but who are its biggest competitors? In this blog post, we've explored Walmart and eBay – two heavy hitters that could give Amazon a run for its money. But there's another competitor to watch out for – Alibaba. With a massive reach in China and an ever-growing product line, Alibaba is quickly becoming a force to be reckoned with in the eCommerce world. If you need help fulfilling products for your business, get in touch with our team at Simpl Team. We can help you take your business to the next level by partnering with one of the top eCommerce providers in the world.