Alibaba Competitors Analysis: 5

Toughest Competitors
Competitors / By John Hughes
Alibaba (BABA) is an e-commerce giant founded in 1999 with headquarters
in Hangzhou, China. It markets itself as a middleman between the producer
and consumer, with affiliates including Taobao Marketplace (consumer to
consumer), Tmall.com (business-to-consumer), Alibaba.com (business to
consumer), and AliExpress (international consumer to consumer) providing
phenomenal growth, especially from 2014-2021.

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In the fiscal year ending March 2021, Alibaba’s gross merchandise

volume (GMV) was 7.49 trillion Yuan, an impressive growth from 1.678
trillion Yuan in 2014. The company recorded revenues amounting to 717.289
billion yuan, with a net income of 143.284 billion yuan during the same
period. This impressive growth is largely due to its strategic e-commerce
platforms, which link millions of sellers with hundreds of millions of
consumers.

Apart from the e-commerce space, Alibaba is also heavily invested in cloud
computing, artificial intelligence, media, and entertainment, with more
ventures on the horizon, including financial services (Alipay). It also prides
itself as “the most valuable brand in China” and has been reported as
“China’s Google.”

Alibaba Business Strategy

Alibaba aims to connect businesses, entrepreneurs, and consumers worldwide
by investing in and developing platforms that facilitate transactions between
them. Its business strategies are derived from Jack Ma’s vision of the internet
as an “open and transparent marketplace.”

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The company leverages its dominance in e-commerce and logistics to create
synergies between businesses, entrepreneurs, and consumers. Its strategic
approach is not limited to transactions; Alibaba also aims to provide users
with a comprehensive e-commerce experience on mobile or internet
platforms.

By incorporating an online to offline strategy, Alibaba can facilitate

transactions while creating new market opportunities for its users. The
company serves as a link between its millions of affiliates and their buyers
and sellers. By initiating this type of relationship with affiliates, Alibaba aims
to create brand loyalty (especially in China) by providing quality customer
service via personal connections.

This strategy is part of Alibaba’s larger “operating system” that connects

businesses and facilitates transactions to maximize user experience and create
market opportunities for affiliates.
From food delivery to cloud storage, Alibaba actively acquires niche e-
commerce companies to strengthen its competitive position in China and
abroad. Its strategic approach to mergers and acquisitions is to provide
effective service to its affiliates while also acquiring customers.

In its early years, Alibaba also focused on incubating and investing in e-

commerce startups that could serve as strategic partners. In the future, it plans
to expand more into delivery logistics and air cargo transport (via
AliExpress), creating new markets for affiliates while providing quality
customer service.

Alibaba SWOT Analysis

Strengths

 Extensive Clientele: Alibaba has over 500 million active users

on its platforms. These include consumers, merchants,
brands/importers, and exporters. With such a large following,
Alibaba is well-positioned to expand globally in the future. In
China, for instance, Alibaba has access to over 90% of the e-
 commerce market, with its Taobao Marketplace being one of the
most popular online shopping platforms.
 Cutting Edge Technology: It has invested heavily in research
and development (R&D); in fact, its R&D budget increased by
over 33.46% Y/Y in the quarter ending 30th June 2021 to $2.09
billion. Alibaba’s extensive R&D portfolio enables it to expand
in niche markets and provide competitive customer service.
 Deep Pockets: Alibaba has over $80.56 billion in cash and
equivalents. The company is also considering acquisitions using
its newly-established Ant Financial, a more than $200 billion war
chest. This allows Alibaba to strengthen its presence in the e-
commerce space while acquiring new customers.
 Mobile & Cloud Solutions: Since its IPO, Alibaba has made
significant investments in developing mobile and cloud-based
solutions to generate and improve user experience. For instance,
its acquisition of UCWeb, a mobile browser developer, has
allowed the company to expand its mobile e-commerce platforms
and strengthen its position in China. Alibaba’s cloud business
also generates high revenues from providing storage and
computing services to affiliates.
Weaknesses

 Counterfeit Goods: While Alibaba has strengthened its

intellectual property (IP) infringement measures, counterfeit
goods remain a significant concern. It works with the government
and brands to combat this problem, but a growing number of
counterfeit sellers on Alibaba platforms remain. The company
could face regulatory penalties if it fails to address the issue
effectively.
 Over-dependence on the Chinese market: While its
international business has grown, Alibaba is still quite dependent
on its revenues. The company’s performance may be adversely
affected by economic downturns in China.
 Antitrust lawsuits: In recent years, the Chinese government
sued several prominent e-commerce companies, including
Alibaba, for violating antitrust laws. Alibaba also faced scrutiny
due to links with local government officials and allegations of
 unfair trade practices. The company has responded aggressively
by increasing its compliance checks and strengthening internal
controls.
Opportunities

 Global Expansion: Alibaba has big plans for international

expansion in the future. The company’s cross-border payment
business, AliPay, has grown at an impressive rate since it was
launched a few years ago and could justify further funding.
 Cross-border E-commerce: In recent years, e-commerce has
become one of Asia’s most popular retail segments. The growing
number of internet and smartphone users, rising disposable
income, and the lack of supply chain infrastructure have
transformed Alibaba into a global e-commerce player.
Threats

 Fierce Competition: China’s e-commerce market is highly

competitive. Alibaba faces stiff competition from local players,
such as V mall and JD.com, which are responding aggressively to
the company’s global expansion plans.
 Trade Wars: In recent years, the US has imposed trade
restrictions against China to balance its large trade deficit. These
measures have affected Alibaba’s international expansion plans
and could hurt the company’s revenue growth in the future.
Alibaba Competitor Analysis
Alibaba faces intense competition in its core e-commerce business from
players such as JD.com and VIP.com. However, the company has several
strengths that allow it to compete effectively with other major players in the
online retail market. Globally it competes with eBay, Amazon, and other E-
commerce companies.

1. JD.COM
JD.COM, Inc. is a major competitor of Alibaba in China’s e-commerce
market. The company was founded in Beijing in 1998 as a small electronics
retailer and eventually expanded into e-commerce. It competes with
Alibaba’s Tmall and Taobao by offering a wide range of products in its
marketplace.

The company’s strategy involves offering products and services in all

significant categories, such as consumer electronics, home appliances, health
& beauty products, apparel & accessories, grocery items, computer software
& hardware. It also offers a large selection of popular brands. JD focuses on
expanding its presence in fast-growing online categories in China, such as
video game consoles and gaming supplies.

Despite its significant presence in China, it lacks visibility outside the

country. The company has launched JD Worldwide to address this issue and
increase its global profile. It focuses on enhancing the customer shopping
experience and building a solid brand to improve its global competitiveness.
It has also made efforts to attract vendors from around the world.

In 2020, JD recorded revenues amounting to 745.802 billion yuan (USD

114.299 billion) and an operating income of 12.343 billion yuan ($7.561
billion). Its total gross merchandise volume (GMV), which includes
consumer spending on its online marketplaces, orders fulfilled by its logistics
arm JD Logistics and third-party sales made on the company’s platforms,
reached 343.8 billion Yuan in 2021.

Its main competitive advantage over Alibaba is its logistics network. It has a
strong technology platform and provides services through its logistics arm JD
Logistics. The company offers delivery services using various modes of
transport, such as planes, trains, motorcycles, and even drones. This gives it
an advantage in the e-commerce market because it can offer faster delivery
options to consumers than its major competitor Alibaba.

2. Amazon

Jeff Bezos founded Amazon in 1994, and since then, the company has grown
into one of the world’s most valuable companies with $1.557 trillion in
market capitalization as of February 2021. Amazon (NASDAQ: AMZN) is
now a leading global online retailer that operates at both ends of the e-
commerce value chain. It powers other retailers with its marketplaces and
also competes with them directly through its retail platform.

While Alibaba dominates the Chinese market, Amazon has a strong presence
in the US and European markets. In the future, Alibaba and Amazon will
compete on an even footing because they have similar business models,
revenue sources (advertising and sales commissions), and types of products
that they sell.

The company’s main competitive advantage is its technology platform. It

offers consumers personalized recommendations and the widest selection of
products. Amazon has also used its technology to make ordering easy for
customers and has invested heavily in predictive analytics to improve its
logistics, offering fast delivery options.

Amazon is also focused on strategic partnerships to grow its user base,

enhance the customer experience, and increase its revenue from non-retail
sources. In China, it has entered into partnerships with Tencent and Baidu to
tap the Chinese market. In the future, it will increase its focus on long-term
growth in China’s e-commerce market by increasing its investment in local
businesses.

3. EBay
eBay Inc. is an American multinational e-commerce company providing
consumer-to-consumer & business-to-consumer sales services via the internet
(NASDAQ: EBAY). eBay’s main business revolves around its online auction
and shopping website. eBay also operates the online payment service PayPal.

The company has a strong market presence in Europe, especially in the U.K.,
France, Germany, Italy, and Spain. It also maintains a large user base in some
countries outside Europe, including Australia and Japan.

Its main competitive advantage over Alibaba is its extensive global outreach.
The company is also a popular online auction site, which gives it an edge
over Alibaba. It serves more than 159 million active users as of 2021, making
it more appealing to international sellers. With the increase in cross-border e-
commerce, eBay’s global outreach gives it an advantage against Alibaba and
Amazon.

In addition, the acquisition of PayPal allowed the company to generate

additional revenue through its payment solutions. PayPal’s strong presence in
e-commerce and mobile payments makes it a good fit for eBay, which has
struggled to produce growth from its core businesses.

4. Flipkart
Flipkart is an Indian e-commerce company founded by Sachin Bansal and
Binny Bansal in 2007. Flipkart is India’s largest online marketplace for retail
goods and supplies. The company operates an online e-commerce platform
and offers promotional services like cash on delivery, installation of
electronic appliances, etc.

Flipkart’s main competitive advantage over Alibaba is that it is a homegrown

company with a strong presence in India. It enjoys government support and
benefits from rising internet penetration, which is set to drive India’s growth
in the e-commerce industry. However, it lacks the extensive global outreach
that Alibaba offers.

Its main source of revenue is sales commissions charged on transactions

through its platform. The company also generates revenue through
advertising services, delivery charges, and the sale of gift cards to customers.

Flipkart is also engaged in investment activities to further its expansion plans.

It has a strong capital base and high cash flow, which allow it to strengthen
its position as the market leader in India’s e-commerce industry. This is
especially true after Walmart’s 77% controlling stake in 2018, which
increased the company’s value to $20 billion. The company is currently
valued at $37.6 billion as of July 2021.

5. Tencent

Tencent Holdings Limited is an investment holding company that provides

online products and services. The company competes with Alibaba in its
online payment service, WeChat Pay, and enjoys partnerships with Alibaba
rivals specializing in Artificial intelligence, cloud computing, and big data
services.

Tencent’s WeChat platform provides the company with a competitive

advantage in its online social media network. It has 1.2 billion active monthly
users, making it more appealing to international buyers. Tencent is focused
on long-term growth and expanding its user base by increasing investment in
localized apps, games, and entertainment services.

Even though their core businesses are pretty different, Alibaba and Tencent
utilize technological innovations to reach out to potential customers. For
example, Tencent’s online payment service WeChat Pay is similar to
Alibaba’s Alipay.

How Alibaba Stands Out Against its

Competitors
Alibaba generates revenue mainly from advertisements, commissions, and
fees for services on its online shopping platform. The company has a strong
capital base and high cash flow, which will allow it to strengthen its market
position in the e-commerce industry.

It incorporates behavioral segmentation strategies through its data analytics to

create tailored marketing campaigns for targeted customers. The company’s
robust cloud infrastructure makes it easy for international merchants to
launch their own branded websites and mobile apps without extra investment
in technical staff. With the acquisition of Youku Tudou, Alibaba is displaying
a commitment to video distribution.

In addition, Alibaba provides cloud computing services to companies in the

healthcare, education, and financial services sectors. This allows it to
diversify its revenue streams, expand into new markets with high growth
potential, and mitigate risk by moving beyond its core businesses.

Alibaba Competitor Analysis (FAQs)

Question: What is Alibaba’s competitive advantage?

Answer: It is a homegrown company with the most dominant presence in

China’s e-commerce industry. Alibaba operates diverse and complementary
platforms under its umbrella, giving it an advantage over other companies
specializing in online shopping and payment or only one platform.

Question: Is Alibaba bigger than Amazon?

Answer: Amazon and Alibaba are two of the world’s biggest online shopping
platforms. Alibaba is bigger in China, while Amazon is more prominent in
America and other countries. In terms of market cap, Amazon is the bigger
company with a $1.674 trillion market cap, while Alibaba has a $465.463
billion market cap.

Question: Is buying on Alibaba safe?

Answer: Compared to some of its competitors, Alibaba offers an extremely

safe platform for both buyers and sellers. The company uses advanced anti-
fraud technology to protect users from scammers and chargebacks on
transactions. When a transaction is complete, Alibaba will send you a
notification that includes the seller’s information if anything goes wrong.

Conclusion
Alibaba provides a wide range of digital products and services, from their
online marketplace to cloud computing. They also have a strong capital base
and high cash flow that will allow them to strengthen their position as the
market leader in China’s e-commerce industry. With such robust
infrastructure and diverse revenue streams, Alibaba is poised for success
against other competitors in the e-commerce industry.

References:

 Logok
 Flipkart Stories
 Flickr
 Alizila

https://businesschronicler.com/competitors/alibaba-competitors-analysis/
Recently we examined the SWOT Analysis of Target, a leading
American retailer. In this article, we will tackle the SWOT Analysis of
Alibaba.
Alibaba is a 24-hour online website where customers can search,
analyze, compare, and buy products. It is a leading e-commerce
website in China and is gradually gaining attraction and popularity
globally. Alibaba was called one of the most valuable tech companies
in the world after raising $24 Billion.
Due to Alibaba’s effective marketing strategies, they have been able to
target specific areas and reach a large customer base. In today’s time,
one of the most effective and successful forms of marketing is Digital
Marketing. Attend our Free Master Class on Digital Marketing 101,
hosted by Karan Shah, CEO and Founder of IIDE, to discover more
about today’s effective marketing.
Before we go into the SWOT Analysis of Alibaba, let’s have a look at
the company, its history, financial situation, products, and rivals.

About Alibaba
Alibaba Group, aka Alibaba.com, is a Chinese multinational
technology corporation specializing in e-commerce, retail, the
Internet, and technology. It was established during the late 1900s by
Jack Ma. The company owns and manages a diverse portfolio of
companies all around the world.

Alibaba Group is a multinational technology conglomerate based in

China, founded in 1999 by Jack Ma and a group of 17 co-founders. It
has grown to become one of the world’s largest and most influential e-
commerce companies.
Alibaba’s primary business operations are around online marketplaces,
facilitating transactions between buyers and sellers, and it operates
several prominent platforms, including Taobao, Tmall, Alibaba.com,
and AliExpress.
This company deals with consumer-to-consumer (C2C), business-to-
business (B2B), and business-to-consumer (B2C) via its website.

Quick Stats on Alibaba

Founder Jack Ma

Year Founded 1999

Origin Hangzhou, Zhejiang

No. of 251,462
Employees
 Company Type Public

Market Cap CN¥ 2.79 Trillion (2021)

Annual Revenue CN¥ 717.289 Billion

(2021)

Net Income CN¥ 143.284 Billion

(2021)

Products of Alibaba
Alibaba holds its position in the market by selling the following –
 E-commerce
 Cloud computing
 Artificial intelligence
 Entertainment
 Mobile commerce
 Retail
 Mobile media
 Films
 TV shows
What’s new with Alibaba.com
 Alibaba Group’s cloud computing unit, 9988.HK made a significant
move on Thursday by releasing two open-sourced artificial intelligence
(AI) models. This strategic move is aimed at competing with Meta
Platform (formerly known as Facebook) in the AI space.
 Alibaba’s CEO and Chairman, Daniel Zhang, is stepping down this year,
and two Alibaba veterans, Eddie Yongming Wu, and Joe Tsai, will take
over as CEO and chairman, respectively.
Target Audience of Alibaba.com
Alibaba caters to a wide range of demographics and geographic
regions, targeting a varied global clientele. A wide range of age
groups, genders, and income levels are catered to by its consumer and
commercial platforms.
Check out the buyer’s persona of Alibaba:

Buyer’s Persona
Name:
John
Place:
London
Age:
35 years
Profession:
Small business owner
Motivation
 Affordable, diverse sourcing.
 Global marketplace access.
 Cost-effective solutions.
 Quality product standards.
 Business expansion.
Interest & Hobbies
 Business, entrepreneurship.
 Tech or innovation (possibly).
 Networking, conferences.
 Fine dining, culture.
 Occasional leisure travel.
Pain Points
 Small business management.
 Efficient supply chain.
 Supplier, product selection.
  Market trends, competition.
 Budget constraints.
Social Media Presence
 Instagram
 LinkedIn
 Facebook
 Twitter
Let us now see the SWOT analysis of Alibaba.
SWOT Analysis Of Alibaba

SWOT Analysis is formulated to obtain a strategic and detailed

framework that is used by a brand to identify its strengths,
weaknesses, opportunities, and threats (SWOT). This analysis will help
the brand to determine its strategies, policies, and competitors.
SWOT Analysis of Alibaba can be analyzed by the following points:
1. Strengths of Alibaba
The strengths determine the qualities that separate the company from
the competitor. The skilled and knowledgeable staff can be called the
strengths of a company. Tangible assets like intellectual property,
capital, and advanced technology are additional strengths of a
company.
 Alibaba, a major online retail company, had the largest IPO ever in
2014, valued at US$231 billion. In 2020, they were recognized as the
fifth largest AI company globally. They dominate B2B, B2C, and C2C
markets, contributing to their remarkable and ongoing success.
 Alibaba’s strong investment in R&D keeps them ahead of the
competition. Their large R&D centers in Hangzhou, Beijing, Hong Kong,
Singapore, Silicon Valley, and Dubai contribute to their continued
success.
 Covid-19 hit many businesses hard, but online ones like Alibaba
thrived, growing by 30% in 2020 as people turned to online shopping.
Their adaptability and operational style played a crucial role.
2. Weaknesses of Alibaba
Weakness is determined when a company lacks in a particular area or
field. Following are the weakness points determined in the SWOT
Analysis of Alibaba –
 Alibaba’s strong market share is mainly driven by its success in China,
but its international presence is limited compared to its dominance at
home.
 Alibaba relies heavily on e-commerce for revenue, which limits its
diversification. If e-commerce suffers, they lack strong backup options
to sustain their business scale.
 One of Alibaba’s weaknesses is its struggle with counterfeit products
on its platforms, which can harm its reputation and erode customer
trust. Counterfeit products not only damage the confidence of
consumers in the authenticity of the items they purchase but also
result in potential legal and regulatory issues for the company.
3. Opportunities for Alibaba
Opportunities lead to an emerging need for the particular product or
when you get good media press this will help to increase brand
awareness.
  Alibaba’s weakness in internationalization can be transformed into a
golden opportunity. With its vast resources and infrastructure, Alibaba
has the potential to expand into multiple regions and become the
world’s leading e-commerce platform, surpassing all competitors.
 Alibaba’s cloud computing business has the potential to dominate the
market due to the vast amount of data generated by Chinese internet
users. By providing a secure platform to store and integrate this data,
Alibaba could further expand and leverage the valuable information for
various opportunities.

After determining the opportunities lets us understand the Threats in

the SWOT Analysis of Alibaba.
4. Threats to Alibaba
When there are new emerging competitors in the market, changes in
the regulatory environment, poor media coverage, and brand switching
are the various threats observed.
 Geopolitical tensions and trade disputes may have impacted Alibaba’s
international business operations and market expansion.
 Economic uncertainties led to reduced consumer spending, affecting
Alibaba’s e-commerce sales and revenue.
 Increased online activity attracted more competition, challenging
Alibaba’s market dominance and requiring enhanced innovation.
 Despite these challenges, Alibaba also benefited from increased online
shopping and cloud computing demand during the pandemic, helping to
mitigate some of the negative impacts.
Now that we have understood the SWOT Analysis of Alibaba. Let us
have a look at any campaign of the brand that failed.
Failed Campaign of Alibaba
Why did the 11 main Alibaba campaigns fail in the American market?
On June 11, 2014, Alibaba launched 11 Main, an online retail site for
unique goods and crafts from local American businesses. It operates
as a platform for smaller merchants to sell their products in various
categories. By early April, it had over 2,000 merchants and processed
1.3 million orders.
After just one year, Alibaba sold the U.S. website 11 Main to OpenSky,
realizing the challenges of the saturated B2C online retail market in
the U.S. Unlike China, 11 Main couldn’t offer the lower prices and
better value demanded by US customers, nor provide the expected
service for US merchants. This experience showed that being
successful in one country doesn’t guarantee success in another.
So we know that brands need to strategize their marketing very well to
beat the competition. Let us further know the competitors of the
brand.
Top 5 Competitors of Alibaba
1. JD.COM: JD.com, Inc. is indeed a major competitor of Alibaba in
China’s e-commerce market. The company’s founding as a small
electronics retailer in Beijing in 1998 marked the beginning of its
journey into the e-commerce industry. Over the years, JD.com has
grown into one of China’s largest and most influential e-commerce
platforms, offering a wide range of products to consumers.
2. Amazon: Amazon, founded by Jeff Bezos in 1994, is one of the
world’s largest and most influential technology and e-commerce
companies. With an innovative focus on customer experience and
convenience, Amazon introduced features like one-click ordering,
fast shipping, and its renowned Amazon Prime membership program.
3. eBay: eBay is a popular online marketplace that was founded in
1995. It allows all individuals and businesses to buy and sell a product
worldwide. It has grown to become one of the largest e-commerce
platforms, offering a diverse array of goods, from electronics and
fashion to collectibles and rare items.
4. Flipkart: Flipkart was founded in 2007 by Sachin Bansal and Bina
Bansal The company first started as an online book store then
gradually started to sell a wide variety of goods, including electronics,
fashion, home essentials, and more. Flipkart is one of India’s largest
and most popular e-commerce platforms. Check the marketing
strategy of Flipkart.
5. Tencent: Tencent is a Chinese multinational technology
conglomerate. It is one of the world’s largest tech companies, known
for its various products and services, including social media platforms
like WeChat, online games, entertainment, and digital advertising.
Tencent has a significant presence in the gaming industry and has
investments in numerous companies worldwide.
With this, we come to the conclusion of the SWOT Analysis of Alibaba.
Let’s briefly summarise the takeaways of this case study.

Conclusion
Alibaba has established a strong stance in the e-commerce market
with its large scale of operations, innovative ideas, distribution
strategies, and strong market share. Even though there are counterfeit
items being sold and their main market force is China, they still are
preferred by many all around the world. China being the second most
populated country is alone their major source of income.
With a strong digital marketing presence Alibaba can reach various
countries while benefiting from the cost-effectiveness of digital
marketing through multiple channels like SEO, emailing, content
marketing, and social media marketing.
Acquiring the principles of digital marketing and completing Certified
Courses may open doors to work with large retailers like
Alibaba. IIDE’s short-term certification courses may get you up to
speed in as little as five days on a variety of digital skills and
expertise. IIDE offers short-term certification courses in social media
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For additional in-depth corporate research like the SWOT Analysis of
Alibaba, see our IIDE Knowledge site. Thank you for reading, and
please share your opinions on the Swot Analysis of Alibaba in the
comments box below.