Although Amazon is a leader in the online marketplace, it is not without its competitors. They range from small specialty websites to retail heavyweights. Here we mention some of Amazon’s biggest competitors and their success stories.
Amazon is a global e-commerce leader founded by president and CEO Jeff Bezos in 1994 just outside of Seattle, Washington. With yearly net sales of $232 billion, it is the most powerful online retailer in the world today.
Although Amazon sits at the top of the heap when it comes to online retail, several B2B and B2C e-commerce stores are holding their own with Amazon and succeeding. So, who are Amazon’s competitors exactly?
Read on to discover the top eight companies that are Amazon’s biggest competitors and how they manage to stay in the race.
Alibaba / Aliexpress
Founded in 1999 by Jack Ma, the Alibaba Group of China is well-situated to compete with Amazon for global dominance. The multinational conglomerate specializes in online wholesale sales, which sets it apart from Amazon.
Another distinguishing feature between Alibaba and Amazon is their general business model. While Amazon is administered as a single entity, Alibaba is divided into three separate businesses:
- Alibaba
- Taobao
- Tmall
Each Alibaba subsidiary competes with Amazon differently. For example, Taobao, a B2C company, rivals Amazon in low-cost clothing, accessories, gadgets, and computer gear sales, whereas the company’s B2B concentration is Alibaba.
Alibaba is one of Amazon Web Services’ major competitors, with cloud computing revenue of $2.24 billion in the three months ending September 30, 2020, up 60% year on year and quicker than the revenue increases of Amazon Web Services and Microsoft Azure, which were 29 percent and 48 percent.
There are 755 million Alibaba users globally as of June 2019. In China, the firm accounts for 58 percent of all online retail sales. In 2020, the Alibaba Group generated $109 billion in revenue, and in 2019, it owned a 55.9% retail ecommerce market share in China.
Alibaba earned $109 billion in 2020 and has 755 million users all over the world.
Walmart
Moving closer to the concept of a budget department store, Walmart is a perfect illustration of an Amazon competitor. It was created in 1962 by Sam Walton in Rogers, Arkansas and is one of the oldest companies on this list.
Amazon and Walmart are two of the largest retailers in the United States, and they are constantly competing. You may find more than 11,000 Walmart stores in 27 different countries. Walmart is best known for its physical department stores and is the king of brick-and-mortar retail, but Amazon is the king of the internet.
Despite the fact that Walmart has been around for 30 years longer, the two companies are now vying for the same customers. Innovation, digital growth, logistics and sustainability are all areas where the two brands compete.
The annual net sales of the big-box retail store are $514.41 billion. That’s more than double Amazon, although brick-and-mortar purchases account for a significant share of Walmart’s sales. The company generated $524 billion in revenue in 2020, up $138 billion from Amazon’s $386 billion in the same year.
Walmart will continue to challenge Amazon in the e-commerce market due to its international reach and consumer base. Walmart’s internet sales have increased by 40% year over year. At this rate, this mega-retailer will be stealing even more Amazon business in the future.
Walmart made $138 billion more than Amazon in 2020.
Otto
Otto, founded in Hamburg Germany in 1949 is one of Europe’s largest e-commerce firms. Its products were first ordered by mail and subsequently by phone before the company shifted to online shopping in 1995, making it the oldest company on this list.
Although Otto is known as a one-stop shop for technology, fashion and sports equipment, its largest market (especially in Germany) is home furnishings. Furniture, appliance and apparel purchases account for 72% of its sales.
Otto’s user-friendly design is one of the reasons for its popularity. Consumers may shop online with ease, thanks to the customer-focused platform.
Otto’s annual growth rate is 13.7% with the company producing $3.8 billion in revenue from internet sales in 2019. Again, in 2020, the Otto Group recorded total revenue of €15.6 billion ($18.5 billion), placing it second only to Amazon in Germany in terms of online sales.
JD
Founded in 1998, JD (JingDong) is a Chinese e-commerce website that competes not only with Amazon but also with the Alibaba Group’s Tmall for B2C e-commerce sales.
JD is distinguished from Amazon by its capacity to purchase in bulk (similar to Costco), and its commanding logistics infrastructure in China. Consumers can purchase a wide range of products at low prices on JD.com.
The online retailer is also an associate of Joybuy.com, a Chinese English-language website that ships to over 200 countries around the world. It also provides customer care 24 hours a day, seven days a week and allows for 30-day returns.
Jingdong has a customer base of over 305 million users. Quarterly active customer accounts are growing at a rate of 22% year over year. As a result, JD.com generated $114.3 billion in revenue in 2020, which is more than Alibaba and a massive 29.3% rise from the previous year. This goes on to show how JD is an up-and-coming Amazon competitor since Alibaba is one of its proven rivals.
eBay
The online auction site, eBay, originated in 1995 in San Jose, California and competes directly with Amazon for customers with similar shopping profiles. Although the company’s revenue has been declining in recent years, it had its largest net revenue since 2013 — $10.2 billion, in 2020.
One huge advantage eBay has over Amazon is that it functions more like a giant yard sale than a marketplace. Sellers put products up for sale on eBay, and buyers search the marketplace for them. Although the process sounds similar to Amazon, it is not quite identical: sellers on eBay can choose to either auction their items or set a fixed price. Amazon does not hold auctions, and the chance of winning a desired product at a bargain price appeals to some buyers, giving eBay a competitive edge with these customers.
Its auction option seems to be working well for eBay, given that with slightly under 20% of market share, it is second only to Amazon for website visitors.
Flipkart
If you live in a western country, you might think Amazon has a huge presence everywhere, but this is not the reality. Flipkart, started in 2007, is one of India’s most popular online retail businesses. In 2018, Walmart acquired a majority stake in the company.
Flipkart’s business strategy is quite similar to Amazon’s with the exception of the Flipkart Plus SuperCoins incentive scheme. Unlike Amazon Prime, SuperCoins are earned rather than bought. When you earn SuperCoins, you get additional services on your Flipkart orders — services that you must pay for with a Prime subscription.
Walmart bought 77% of Flipkart’s stock in 2018, valuing the company at $22 billion. There’s no knowing where it will go now that Walmart owns a majority share in the company.
Flipkart has over 100 million registered users, and its income has been increasing, with a reported growth of 12% in 2020 over the previous year. It is one of Amazon’s largest competitors for Indian e-commerce business, which is growing at a rapid pace.
Rakuten
Founded in 1997 in Tokyo, Japan, Rakuten is more than just an e-commerce company; its ecosystem includes a streaming service (Rakuten TV), banking and payment services, telecommunications, and even health and life insurance.
In terms of retail strategy, Rakuten has a unique business model. Customers are enticed to shop through Rakuten rather than directly with brands through a cash-back system. This means when you buy your MacBook via Rakuten, you earn a cash-back reward that you wouldn’t get if you bought it directly through the Apple website.
This methodology (together with its innovative environment) has won it 1.5 trillion Japanese yen (about $13.6 billion) in net income and a 15.2% in year-over-year growth in 2020.
Retail e-commerce sales amount to more than $2.3 trillion each year in this industry. Rakuten owned 14.1% of the overall worldwide e-commerce market in 2019. Furthermore, these sales account for roughly 10% of Japan’s overall online retail market share.
It bought buy.com in 2010 to increase its footprint in the United States. Rakuten has also bought other e-commerce startups such as PriceMinister (France) and Play.com. It even bought Ebates (cashback rewards) and Viber (VoIP software). As an Amazon competitor, Rakuten continues to expand.
Rakuten has a net income of $1.5 trillion Japanese yen ($13.6 billion) and a growth rate of 15.2% in 2020.
Newegg
Newegg poses a threat because Amazon’s most popular category is electronics. Newegg is a global leader in online sales of computers, televisions, cameras, phones, and computer hardware.
In the United States, 44% of Amazon customers have purchased an electronic item — sales it relies on. By selling technology at low prices, Newegg earns $2.7 billion in income and deprives the larger company of billions of dollars.
Entrepreneur and businessman Norman “The Beard Guy” Farrar stands at the forefront of the economic mega-machine known as Amazon Marketplace. As a leading expert with over 25 years of product sourcing, development, and branding expertise, Norm is an advisor to many and an inspiration to all.
