Alibaba And Amazon Follow Different Business Models Explained Jack Ma
Mr. Jack Ma explained the difference between Amazon and Alibaba.
Over the course of time, Alibaba Group Holdings Ltd. has established itself as an E-Commerce giant that is reigning over this segment across the globe. The company's core rival in this business is Amazon Inc. that is a major force to reckon for them. According to Mr. Jack Ma, the founder and chairperson at Alibaba however does not believe that the comparison is fair.
According to him, both the companies are currently operational on relatively different business models that cannot be compared. On the other hand, the priority of Chinese e-commerce giant at this points of time i to help businesses flourish and evolve so that they can actually become like Amazon Inc.
Emily Chang was conducting the interview of Mr. Jack Ma for Bloomberg where he stated, what Amazon really does is operate like a retailer by buying and selling products. On the other hand, Alibaba is a complete platform. So if Amazon can be referred to as a 'great apple' then BABA itself is an 'apple tree'.
Mr. Ma highlighted that currently there are more than 10 million small, medium and large sized businesses that use the platform. So Mr. Jack Ma's company has actually established a marketplace for these businesses. Apart from that, they are in the computing, logistics, and computing business.
Mr. Ma stated "We believe every company can be an Amazon." He further added, "We want to enable every company to be an e-commerce [business]. So I don't think Amazon and us will compete."
So Mr. Jack Ma actually took the opportunity to clear that Amazon and Alibaba are not competitors merely because the business of Amazon is to buy and sell goods that are present in their inventory. On the other hand, Alibaba just acts like a middleman which allows retailers to connect with buyers providing them a marketplace to govern their business.
Another thing that differentiates both the businesses is that Alibaba gives a platform to retailers but does not charge them at all. The only way it churns in revenues is through the advertisements that run on its platform. On the other hand, all the products sold on Amazon have prices that are inclusive of the company's profits.
Hence in a nutshell, Mr. Ma has clearly explained that there is no such point in comparing Amazon with Alibaba as both of the commodities are completely different in nature and business model. Both have no resemblance when it comes to operations at all.