Secrets of Amazon and Alibaba: Dominating E-Commerce with Innovation

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Amazon and Alibaba are now household names in e-commerce, conglomerates that have a global reach and impact, envied by even the top-ranked Fortune 500 firms. Today, Amazon is valued at a mind-boggling $1Trillion while its Founder and CEO, Jeff Bezos is now the world’s richest man with a net worth of $116 Billion. Alibaba Group, for its part, is now the 6th highest valued global brand at $500 Million, and its founder Jack Ma has a net worth of at least $49 Billion.

Leveraging Technology

What is their secret? How did Bezos and Ma achieve such historic business and financial success? The first secret is to be found in technology. Technology may very well be the ticket to profit in trillions. Of the 10 Wealthiest People in the World in Bloomberg’s 2020 list, seven were involved in the technology.

Specifically, their strategic use of enterprise data collection enabled their companies to gather billions of bytes of data and information. The ‘big data’ is processed and analyzed to produce actionable business intelligence. The data includes the target market’s size, age range, sex or gender, most visited websites and social media pages, the average number of minutes spent online, frequently visited locations based on GPS tracking, favorite destinations for leisure and shopping, and most commonly searched items or topics on Google and other browsers, to name few.

Using different bodies of information as marketing and sales leads, both Amazon and Alibaba can hone in and hit a bull’s eye in terms of customer interest and demand. Their efforts to know the customer and shape market demand directly improve their sales and revenue year after year. Quarterly, they do extensive reviews of the analytics to see of their advertising and promotions match the changes or mood in the market.

These mega-corporations leverage technology to exponentially improve the quality, speed, and efficiency of their business to include online retail operations, customer services, inventory control, logistics management, finance and accounting, product warranty, and insurance services, to name a few. They also rely on data management technology to provide customers with a secure payment system such as Amazon Pay and Alipay.

Global Reach Via International Operations and Digital Marketing

These two companies have been going head-to-head for a few years now, with Alibaba gaining the upper hand in terms of the customer base at 493 million. Amazon has an existing customer base of 310 million. When the companies were founded, Amazon had a more target market in mind, that is, the online bookstore segment. As China’s largest e-commerce firm, Alibaba had the vision to be the world’s online super mall, offering anything and everything it can sell — which are mostly made in China, in the first place. In terms of operational scope, Alibaba outflanks its business nemesis with its army of suppliers and buyers in 200 countries around the world. Amazon only has international shipping in 100 countries.

When it comes to traditional and digital marketing, Amazon was only successful in gaining 3 percent of the US market, while Alibaba has 11.8 percent of the China retail market. While Jack Ma’s business empire had already shown a slowdown, it still beats Amazon in terms of the total value of sales.

e-commerce

A look at internet penetration rates, however, would show that Amazon is still gaining. Of the 321 million US population, at least 286 million were active internet users, which means that 8 out of 10 Americans use the internet and e-commerce. Alibaba, on the other hand, enjoys marketing to at least 731 million internet users out of China’s 1.3 billion population, which translates to only 5 out of 10 people in China have access to the internet and e-commerce.

Another battle has been set this year in 2020. Industry experts predict that the US e-commerce market will be worth at least $632 Billion, but e-commerce in China is expected to boom by $1.7 Trillion. Both companies will continue to invest in digital marketing to sustain their online presence and keep their brands top-of-mind in their defined but sometimes overlapping markets.

Brand Image

Bezos is known for saying this about brand image and identity: “Your brand is what other people say about you when you’re not in the room.” So far, going by its sales record alone, Amazon seems to be well-liked for its fast, convenient service. In terms of branding, Amazon also seems to be more consistent, while Alibaba has more flagship products and company brands under its banner. In terms of brand identity and market trust, Amazon has overtaken its rival from Asia.

But Alibaba is by no means a pushover. Jack Ma, although now officially retired from Alibaba, made such a strong imprint with his speaking style, engaging stories, and his outrageous music concerts for company employees make him an engaging personality. The company itself was branded as the “everything company,” which means that every customer can find everything they want in Alibaba and need to go anywhere else.

Indeed, it is hard to peg the success of these companies to any one single thing. But their strategic use of data and technology, branding, leadership personality, and focus on fast and convenient customer service has made them reap unparalleled success.

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