Amazon has grown into one of the world’s top companies that only started out as an online bookstore. It’s no surprise that the list of Amazon competitors is huge and is increasing. This giant has successfully gained millions of sellers across the globe. And there are still new businesses and startups that are registering themselves on the platform
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But why? Well, this platform provides immense opportunities to sellers in terms of business growth and audience reach. Indeed, big companies like Amazon have taken the world by storm; however, the debate is whether Amazon still has the same competitive edge that it used to have years ago. Or is it still advantageous for businesses across the world? Maybe. Maybe not.
Before we dissect the details of Amazon competitors, it’s ideal to understand its current situation first.
About Amazon
An American multinational technology company, Amazon focuses on eCommerce, online video streaming, cloud computing, artificial intelligence, and online advertising.
Jeff Bezos, a founder of Amazon, originally started this company as an online bookstore. Later, he diversified his business into multiple categories like music, movies, electronics, fashion, home, travel, beauty, and more.
Amazon sells these products or services directly or by being a middleman for other retailers.
Growth of Amazon
Companies like Amazon don’t achieve sustainable growth overnight. It may seem like their journey was easy. But the reality is different.
Amazon has had its own share of challenges and shortcomings. It wasn’t always rainbows and rays of sunshine for them because the company saw many losses, legal battles, and more throughout their journey.
But amidst these shortcomings, it saw exponential business growth over the years. Therefore, it’s not surprising to see its consistent increase in sales.
Amazon’s Present Situation
Before we deep dive into its current situation, it’s important to understand its business model.
With big companies like Amazon, figuring out their business model can be overwhelming because of the presence of various factors. The company has a wide reach in terms of products, services, and geography.
Its customer segment is majorly divided into three categories: sellers, buyers, and developers. While sellers and buyers use Amazon to sell and buy products respectively; developers are involved with its cloud computing platform.
Coming to their business model, it is based on three value propositions: low price, quick delivery, and a wide range of products.
Cut to present: this business model is still working well for them because they have covered three top benefits for their audience. It is also believed that the online store contributes over 50% of revenue. The remaining 50% of revenue is covered through online video streaming, Amazon web services, third-party sellers, and more.
All these mediums are inclusive of commissions, shipping, sales of advertising services, products and digital goods sold on a transactional basis, and more.
Companies like Amazon have to nurture relationships with their customers because of different communication mediums like email, telephone, online chat, and more. This helps in easy communication and solving their queries quickly.
Top 12 Amazon Competitors
Amazon is consistently growing by adapting to the latest trends. From grocery shopping to online streaming, it has covered everything. Therefore, there is a rise in the list of Amazon competitors in India, the USA, and other countries across the world.
Amazon competitors can be segregated into three groups, and they are eCommerce, video, music & ebooks, and brick & mortar stores.
So let us get straight to the list.
Alibaba Group
Who is Amazon’s biggest competitor — the Alibaba Group!
Founded by Jack Ma in 1999, Alibaba Group’s main retail subsidiaries are AliExpress, Taobao, and Tmall. It competes with Amazon in different ways and caters to products and services in niches like B2B, B2C, and C2C verticals.
It is a Chinese multinational company that majorly specializes in eCommerce, retail, internet, and technology. The company's headquarter is in Hangzhou and saw a revenue of $134 billion in 2021.
Irrespective of Jack Ma’s controversy, Alibaba Group has continued to be China’s top and third-largest eCommerce company in the world. Millions of users and merchants use Alibaba today.
However, reports say that Alibaba saw lower revenue by the end of December 2021. There are two main reasons behind it: Weakened consumer demand and lack of diversification.
If Alibaba Group focuses on the same, it can continue to stay strong and be one of the biggest competitors of Amazon.
Walmart
Founded in 1962, Walmart is popularly known for its brick-and-mortar stores.
It is an American multinational corporation that operates a chain of hypermarkets, discount department stores, and grocery stores in the United States. Walmart is headquartered in Bentonville and has approximately 10,500 stores and clubs under 46 banners in 24 countries.
Walmart is also Amazon’s biggest competitor as they are the two big retail companies in the US, competing directly with each other.
Customer attention, cost controls, and efficiencies in its distribution networks at an early phase helped Walmart in establishing itself as a leader in the retail industry. Not only retail, but the brand competes with Amazon in different categories like logistics, digital growth, goods & services, and more.
Since both Amazon and Walmart cater to the same target audience, it makes the retail space more competitive for the companies. Therefore, constant creativity and innovation are important to stay ahead of the competition.
Flipkart
Based out of Bangalore, India, and founded in 2007, Flipkart is Amazon’s biggest competitor in India. They cater to the same target audience and Flipkart sells products across similar categories that we find on Amazon.
Surprisingly, Flipkart too started as an online bookstore to sell books all over India. But, it soon started selling products across different categories like fashion, electronics, home & furniture, beauty, grocery, and more.
In 2018, Walmart, the world’s biggest multinational company bought 75% of its share, making it Flipkart’s major shareholder and owner. It has been growing steadily over the years and even saw a good 125 increase in its revenue in 2021.
Flipkart’s business model is on similar lines to Amazon’s business model; however, there is one major difference. In Flipkart, users earn SuperCoins with the Flipkart Plus SuperCoin Reward Scheme i.e., they don’t have to pay but earn these coins.
eBay
When we speak about eCommerce store competition, eBay is considered to be one of the biggest Amazon competitors in the USA.
Founded in 1995, it is based in San Jose, California, and is a direct competitor of Amazon. Although, people know that eBay has been incurring losses. But that’s not true. Do you know why?
Because in 2022, eBay earned a net revenue of $9.89 billion and is growing stronger.
Businesses can sell both new and used products on this platform to millions of users. Like Amazon and Flipkart, eBay sells similar product categories to its customers across the globe.
However, here’s something that differentiates this platform from Amazon, making it to the list of Amazon competitors in the USA — Sellers can auction products or have a fixed rate for the same. Whereas, Amazon does not offer such unique features to businesses who have registered with them.
This is what gives it a unique position to eBay in the industry over big giants like Amazon. They cater to both B2B and C2C businesses.
Rakuten, Inc
Amazon’s competition isn’t just limited to the USA or India: it has competitors across the globe. And next on the list of Amazon’s biggest competitors is Rakuten.
Launched in 1997, Rakuten is a Japanese eCommerce company. Along with online shopping and credit card payments, they even focus on operating Japan’s largest bank and other categories like travel, banking, securities, insurance, mobile carrier service, professional sports, and more.
Currently, Rakuten Group is running a total of 70 businesses that cater to different industries. They have indeed gained immense popularity and traction over the years.
With 23,841 employees, Rakuten is soaring high and growing exponentially. It even partnered up with one of the eCommerce giants in the world and Amazon’s direct competition — Walmart.
This partnership was formed to deliver groceries that can be purchased online by consumers and delivered by the respective platforms to their doorsteps.
Rakuten has indeed established itself as a leader in the eCommerce industry and is definitely going to grow quicker with its increasing revenue.
Online Stores
Are online stores the biggest competitors of Amazon? Surprisingly, yes!
It’s true that Amazon has captured a massive percentage of the eCommerce industry by catering to different categories and reaching a wider audience all around the world.
But, online stores can still have a competitive advantage over established companies like Amazon. Because these small stores stand out in the market through their creativity and uniqueness.
They may not mass produce goods or sell everything like Amazon does; however, these online stores find a unique selling proposition and stick to that. Rather than capturing the entire market, they tend to sell products that are unique and can’t be found anywhere but in their online store.
For example, one online store can specialize in kids’ toys. And others may specialize in online boutiques. People tend to choose them over Amazon’s products because of the quality and uniqueness that is not available on platforms like Amazon.
It’s true that no company can compete with Amazon when it comes to price, delivery, and customer support; however, if someone wants to scale their business in terms of innovation, quality, and personalized experience, then creating an online store is the key.
Therefore, online stores have a competitive edge and cannot lose to Amazon easily.
JD.com
JD.com is another established eCommerce company situated in Beijing, China. Founded in 1998, its current revenue is around US $108.3 Billion.
The company sells products under top categories like electronics, phones, computers, and more. Studies also say that JD.com has recently even stepped into spaces like AI and robotics.
Since it's a technology-driven company, adapting to the latest technological trends can prove to be beneficial for them. After Alibaba Group, it is the top eCommerce company in China that caters to a wide audience and has attracted millions of users to its platform.
Target
Whenever someone asks who is Amazon’s biggest competitor, there cannot be just one answer. Because the list is too long. And Target, a retailer of general merchandise and food products, makes this list.
It was founded in 1902 and is headquartered in Minnesota, USA, with a current revenue of US $93.56 Billion. Target is one of the oldest competitors of Amazon and the largest discount retailer in the world.
Like Amazon, it sells a wide range of products like home decor, furniture, electronics, clothing, and more. Not only are its customers loyal to the company, but according to studies, 70% of employees say that Target is one of the best places to work and is welcoming.
People are given immense opportunities in the company and are welcomed wholeheartedly. Thus, it is undoubtedly one of the oldest and best retail platforms globally with several loyal users.
Netflix
Today, almost all movies and web series are streamed on Netflix. It is the direct and biggest competitor of Amazon under streaming services. Along with Amazon, every household will have at least one account subscription to Netflix.
It was founded in 1997 and is headquartered in California, USA, with a whopping current revenue of US $28.63 billion.
Pros and Cons of Amazon
Sellers want to register their businesses on platforms and sustain their growth. While customers want to use Amazon to explore a wide range of products at a lower cost with a quick delivery time.
Amazon is always on top of everyone’s mind; however, before sellers decide to establish their business on this platform, they should consider certain factors.
Let’s deep dive into its pros and cons that sellers should know before getting into it.
Pros:
Wide Reach: Millions of buyers use Amazon every day for shopping products like electronics, apparel, books, furniture, and more. Putting a business on Amazon will give a wider reach and tap into the potential audience across the world.
Brand Name: Every business wants its brand name to be on top of every customer’s mind. While social media marketing can be one of the ways to do it, registering your business on Amazon can do wonders. Because selling on Amazon comes with trust, loyalty, and authenticity.
More Sales: Since Amazon has a wider reach among its audience, the possibility of an increase in sales and revenue is higher. Once people start using a product from Amazon and establish trust, they will keep buying it again and again.
User-friendly: Often, eCommerce platforms are complex and require thorough understanding. But, it’s not the same with Amazon. This platform is specially designed for sellers and is user-friendly and easy to use. It has all the tools that can be leveraged by sellers for a seamless selling listing and selling process.
Flexibility: Businesses need flexibility to sustain growth and cater to a wider audience. And Amazon does the same thing i.e., this platform provides flexibility to businesses in terms of currency, location, timings, no.of goods, and more.
Low Marketing Costs: It is one of the top benefits of Amazon, especially for businesses that don’t have much budget to spend on marketing. It is because Amazon attracts millions of users to its website daily and thus, can help you access this audience.
However, since there is immense competition on the platform, your business needs to stand out to attract many eyeballs and get conversions for your products.
International Expansion: Amazon does not limit business to one country. Since it is globally trusted by both buyers and sellers, businesses can start selling their products in different markets across the globe. This helps businesses in expanding to international markets easily, increase their brand awareness, and build their credibility.
Cons
High Competition: This goes without saying. Because millions of sellers have their businesses registered on Amazon. And many new businesses are coming up on the platform every day. Furthermore, these brands are spread across different verticals, automatically increasing competition for business across categories. Therefore, it is difficult and challenging to establish a new business on platforms like Amazon.
High Cost: While one can save huge marketing costs for their business, they still need to incur costs from Amazon that charge high fees for FBA, referrals, advisor fees, and other types of fees along with membership charges. Therefore, it may be difficult for businesses, especially startups, to afford the high cost of Amazon.
Amazon’s two selling plans are:
● Professional - $39.99/mo with no per-item fee
● Individual - no subscription fee but a $0.99 fee per item sold
Order Management: One of the biggest problems with Amazon is that it doesn’t focus on or integrate with shopping cart systems. This makes it difficult for sellers or merchants to manage their orders and keep a track of the same. Moreover, keeping the stock up-to-date becomes a challenge.
Therefore, businesses can use third-party tools to manage their order and keep a track of the same.
Low Margin: It is not surprising that Amazon may charge a fee for the products you are selling on the platform. Thus, it may not be a profitable option, especially for businesses that are selling small products at lower prices. Because they will end with either less or no profit.
Conclusion
There is a huge list when it comes to Amazon’s competitors. There are businesses across the world that are selling similar products across a wide category like Amazon. And surprisingly, the audience is majorly aware of these platforms and is using them. Thus, it can become difficult for Amazon to stay competitive in the market.
If Amazon wants to stay consistent and be at the top of the list, the team has to constantly adapt to the latest trends and utilize them in its overall strategy. Or else, other big players like Walmart, Alibaba Group, Flipkart, and more will take over the company in no time and establish themselves as the market leader.
If you are a seller looking forward to registering your business on Amazon, go through its pros, cons, and policies carefully. Make a decision after carefully analyzing it. Because there are higher chances that your other expenses might increase as compared to profit.
Therefore, it is important to understand the platform in detail, analyze it, and then make a decision.
FAQs
What company is similar to Amazon?
The list of Amazon’s competitor companies is long because it has competition in similar sectors. But, companies like Walmart, Alibaba Group, and Flipkart are its direct competitors.
Who was Amazon's first competitor?
Amazon’s first competitor was Walmart, which is one of the oldest and biggest eCommerce companies in the world. It was founded in the year of 1962.
Other than that, it faces competition across categories:
For retail: Alibaba, Target, eBay, Walmart, JD, Flipkart, and Rakuten
For streaming services: Netflix, AppleTV, Disney+, Hulu
For cloud or web services: Alibaba Cloud, Microsoft Azure
How many competitors does Amazon have?
Amazon has a huge list of competitors. Some of its biggest companies that are ruling the industry are Alibaba Group, Netflix, Walmart, Rakuten, Flipkart, eBay, and more.
What competition does Amazon face?
Amazon faces competition or rivalry across different industries like eCommerce, online streaming, and brick & mortar stores.
For example, Netflix is its direct competitor under online streaming, Alibaba under retail stores, and Walmart under brick & mortar stores.
Is Alibaba bigger than Amazon?
In terms of scaling, Alibaba is way bigger than Amazon and sells more product categories to its customers. And it is possible because of Alibaba’s business model that is a bit different than Amazon’s business model.