Amazon And Alibaba Business Models

Amazon and Alibaba business models

Introduction

How does the comparison of Amazon business models help and alibaba to better understand the improvement of a company? Electronic commerce can be defined simply as the new way of buying and selling through digital platforms such as websites, applications, social networks, among others;And currently due to the facilities it grants, it has become an indispensable activity for companies or individuals who seek to market their products. Electronic commerce since it was born has not stopped growing and expanding. 

The above because it offers the opportunity to exponentially increase the sales of a business, reaching a greater number of customers, covering different markets, experimenting with different products and services;And, therefore, the possibility of increasing income through the maximum use of the Internet. Currently, there are electronic commerce companies such as Amazon in the United States and Alibaba in China that have grown exponentially until they are world leaders.

Developing

They have stood out for using innovative and constantly evolving business models, however, their business models are different. For this reason, it is important to analyze this topic, mainly in regard to the business models that use Amazon and Alibaba, through the qualitative approach to be able to determine how does the comparison of Amazon’s business models help and alibaba tobetter understand the improvement of a company?, To achieve the above, we will briefly analyze Amazon’s origin and business model.

Amazon Unlimited Society is the largest electronic commerce company in the world, in which you can find a wide variety of products. Founded by Jeff Bezos in 1994 in the United States, it is based in Seattle Washington and its main activity is electronic commerce (it was one of the first companies to market goods online), but it also offers computer services. Currently, it has independent websites in Germany, Australia, Austria, Brazil, Canada, China, France, India, Italy, Japan, Spain, United States, Mexico.

United Kingdom and Ireland and Netherlands;In each of these countries Amazon offers specific products and in some other countries perform technical support functions, such as in Costa Rica. To understand the company it is important to talk about its origin. How mentioned above, it was founded in 1994 by Jeff Bezos, who after he resigned from his job as vice president of the company D.AND. Shaw & CO (Wall Street firm) moved to Seattle and there formulated a business plan to offer products through the Internet.

It read a report that ensured annual growth of 2,300% in electronic commerce. He chose the name of Amazon inspired by the Amazonas River, since he considers him a very extensive and exotic place, that is, as he visualized his store. He decided to offer books on his website, which was a success due to the wide variety of titles and at the low prices of the books offered by the website;And in just two months he managed to sell in more than forty -five countries, invoicing up to twenty thousand dollars per week.

The business model based solely on electronic commerce with which Amazon began was quite unusual yields were already expected until after five years and, due to slow results, shareholders predicted that the company would not reach the necessary profitability in the long timeto justify the investment and that would probably not survive in the long term. However, Amazon survived and grew exponentially until it became the world’s largest electronic commerce website.

In 1999 Jeff Bezos was recognized as the person of the year by Time magazine, which highlighted the company’s success. In 2001, Amazon’s profits during the fourth quarter of this year were 5 million dollars, which evidenced that Jeff Bezos’ business model began to succeed. But Jeff Bezos did not settle only with the electronic commerce business model, so on October 11, 2016 he announced the construction of physical stores and this new business model called Amazon Gozon.

Which would be the first physical supermarket with artificial intelligence, which would use the “Just Walk Out” technology, the store opened the general public on January 22, 2018. In that sense, it should be noted that the Amazon business model evolves and is constantly expanded to improve the purchase process of its customers, and in this we can identify the following important points: Volume: Amazon takes a commission for each product it sellsRegardless of the priority, the volume is, which allows you to offer low prices and keep your customers.

Business Intelligence: Amazon focuses on knowing its customers, in fact it is considered one of the precursor companies of Big Data, since it was one of the first websites to use the client’s previous purchasing information, as well as their comments to implement improvements. Logistics: Amazon is distinguished from other companies in their ability to organize, deliver and send millions of orders, without delays in the delivery times agreed with their customers. Amazon Prime: Program to improve the purchase experience that offers a lot of advantages when acquiring products on the website, in addition to other digital services. 

conclusion

This program rewards the most constant customers, but also reinforces the custom of purchase at Amazon. Amazon Cash: Another Amazon program that improves the customer experience that allows consumers to acquire products without the need to use cards, as they can add cash to their credit on Amazon, that is, they can have an Amazon account and recharge itAs if it were a prepaid telephone line, in participating commerce centers. Opening of physical stores: In the Amazon Go physical store, the customer uses the Go application to enter the store.

Computerized vision and automatic learning systems track what the customer takes or returns from the shelves and when the store leaves the application will track the purchase that the invoice that will be charged to their Amazon account will be issued. Delivery times: Amazon sends daily and in addition to having programs like Amazon Prime, it has Amazon Fresh which is a service specialized in online food sale and also fresh products that allows the customer to receive their purchases during hours.