Compared with entering other parts of the world, Alibaba will be easier to enter Amazon's core market. Let's take a closer look at their odds, because this will be an interesting battle.

Amazon is the undisputed e-commerce leader in the United States and Europe. Although this situation is unlikely to change soon, there is a global player who is constantly being compared with Amazon and regarded as its strongest competitor. Of course, we are referring to Alibaba, the largest e-commerce market in China and even the world.

Until now, the two companies have not had much influence on each other. In addition, the two companies have little influence in each other's market. On the other hand, Alibaba plans to aggressively enter Europe in the next few years, investing up to US$15 billion in logistics.

Even if this venture fails, one thing is certain: Compared with Amazon in China, Alibaba will have easier access to Amazon's core market. Let us take a deeper look at the performance of these two companies in the upcoming showdown.

If you look from the outside, Amazon’s sales seem out of reach

Amazon's 2018 sales were 232 billion U.S. dollars, a year-on-year increase of approximately 31%. Compared with Amazon, Alibaba's annual revenue of 39.9 billion US dollars may seem insignificant, but Alibaba may become an important competitor in the next few years. Even if it maintains a strong growth rate (58% in 2018), if the situation remains the same, Amazon will continue to lose out to the leader of the Chinese e-commerce market. This is especially true because the net profit margins between the two are already equal.

Alibaba's sales have not yet reached Amazon's level, but with the expansion of Alibaba to Europe and the rapid growth of China's e-commerce, this situation may change.

China's e-commerce market has huge potential.

When you compare the promotional activities organized by the company "Singles Day", it is not difficult to understand the potential market that China's e-commerce industry provides for Alibaba. Alibaba made $30.8 billion on Singles' Day. During Black Friday and Cyber Monday, US retailers generated 21 billion U.S. dollars in sales.

China has long been the world's largest e-commerce market. The reason is that China has a large number of Internet users: According to China Internet data, since 2018, China has more than 802 million users. The number of people living there is more than twice that of the United States. Although Alibaba has surpassed Amazon in China, the company still has a lot of room for development. In fact, Alibaba has much more room for growth in its main regions than Amazon.

How difficult is Amazon operating in China

Due to the huge scale of China's e-commerce, it is one of the most attractive markets for international online companies. In Europe, despite Amazon's dominant position, its market share is fairly evenly distributed, while Alibaba's B2B and B2C platforms in China account for approximately 60% of the entire e-commerce market. The company behind Alipay, the world's largest online payment service, is also known as Alibaba.

But even Amazon has failed to break through the 0.7% market share barrier since it was founded in 2004. The following factors indicate that it will not rise too much in the next few years:

Prime's added value is insufficient. Compared with Europe and the United States, Amazon Prime's advanced features may convince fewer Chinese buyers. Another advantage of shopping on AliExpress and JD.com is that there are no delivery fees. However, Prime's video programs are basically unrestricted in China.

The mobile market is highly competitive. Mobile devices contribute 60% of China's e-commerce revenue. In terms of shopping convenience and entertainment value, incumbent suppliers have already met the needs of customers well. Although Amazon has powerful and powerful applications, it must follow the experience element in order to remain competitive. Alibaba's Taobao app uses social networks, dialogue, and vivid visual effects to significantly increase user engagement.

●There are high-quality brands from the United States and Europe. Before Alibaba and JD.com, Amazon was a leader in providing quality brands and products from all over the world. Therefore, buyers who prefer Western brands can easily find them.

What is the prospect of Alibaba in Europe?

There is no doubt that the "Electronic World Trade Platform (eWTP)" in Liege, Belgium will become Alibaba's first European logistics center since the end of 2018. This will be the sixth eWTP after Hong Kong, Moscow, Dubai, and Kuala Lumpur.

Will the growth of Alibaba in Europe in the next few years seriously harm Amazon? Probably not, because the market is already too concentrated and Amazon is responsible. Nevertheless, there is clearly room for development-as evidenced by Alibaba's recent success with AliExpress. After Amazon and eBay, B2C applications have become popular purchasing tools.

A new era in the e-commerce world has begun

The results of the competition between Amazon and Alibaba can only be known in the future. In terms of technological progress, artificial intelligence will be an area of particular concern. Alibaba has a competitive advantage over Amazon by virtue of its outstanding innovation capabilities. In addition to developing artificial intelligence chatbots and neural networks to speed up product launches, the Chinese company has also established artificial intelligence systems to help with investment. According to MIT Technology Review, Alibaba's voice assistant is already better than Google.

So, who do you think will win in the end?

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