The global supremacy war between e-commerce giants Alibaba and Amazon is never without heat, especially as the Chinese online retailer surpassed its US rival to become the world’s biggest e-commerce company.
With the likes of American tech giants Apple, Google, Microsoft, Facebook and Amazon – let’s make room for China’s Alibaba Group. The company is craving up China as the globe’s single-largest internet market, boasting over 700 million online users.
On 10th October Alibaba’s market value rose to US $472 billion, just above that of Amazon’s US $471.9 billion cap for the first time in two years, according to the graph below.
While Amazon has nothing to worry about just yet as (let’s be honest) it’s doing pretty well, Alibaba is having one fine year, even surpassing its own ambitious expectations. At the start of 2017, Alibaba’s stock rose 109 percent – the company is now the 6th largest company globally, according to Bloomberg.
And, it doesn’t stop there, with the company’s chairman and founder Jack Ma predicting that by 2036 Alibaba will be the fifth largest economy in the world, overtaking the GDP of countries like India, Germany and the UK. Now that’s ambition!
Alibaba has managed to stave off anxiety surrounding China’s slow economic growth by diversifying and investing beyond e-commerce. The company is now a major player in video streaming, cloud computing, online payments, bike sharing, luxury car vending machines and even live crab claw machines – yes you read right. In September Alibaba launched crab claw machines in Chinese shopping malls that dispensed live crabs to coincide with the start of crab season.
Still, e-commerce remains at the heart of Alibaba’s interests, which continues to be a money-spinner and where it continues to dominate and sell everything from frozen chicken feet and jumbo jets to anti-pervert flamethrowers (now that’s a topic for another day).
With all that success, the company is showing strong future growth, accentuated by its latest earnings results, reporting that profit for its most recent quarter more than doubled compared with the same period last year, which involved a 61 percent spike in revenue. In comparison, Amazon saw a 34 percent revenue rise for the period.
While the company says its now looking into “new retail”, that is, integrating online and offline channels, with its upcoming 11.11 Global Shopping Festival incorporating traditional retail for the first time, e-commerce still generated close to US $3.6 billion during the last quarter, which is up 50 percent from the previous year, representing 90 percent of its Chinese revenue.
Ma has circled new retail and taking the Alibaba brand global as two major investment pathways for the company’s future growth and success, recently vowing that he would create over a million jobs in the US that world link small American businesses with Chinese consumers.
Still, analysts are predicting an economic choke in China, but Alibaba looks likely to surpass this, what with its half a billion plus consumers that shop its platform annually, which is only set to increase as the country’s consumer class expands. The world’s largest online shopping market has room to grow yet.