Amazon is the biggest e-commerce company in the world, headquartered in the US. Apart from the e-commerce sector, the company has also established a strong presence in the cloud computing service industry. The Amazon business model has proved to be quite successful in pushing the company to the leadership position, but at the same time, it has also exposed it to steep competition in the global market. Some of the key Amazon competitors have been discussed in this article.
In accordance to Forbes, Alibaba is among the top Amazon competitors whose stock has increased by 26% in 2018 in comparison to a 100% stock increase in Amazon. However, Alibaba’s growth in its revenue during the 2017-19 period was 144% higher than the solid 58% revenue growth for Amazon during the same period. It is forecasted that the biggest Amazon competitors namely Alibaba will outperform Amazon in the medium term due to their core e-commerce operations that have light supporting infrastructure.
Rivals in Market
Amazon spent $4 billion plus in coronavirus-related activities, however reported better second-quarter profits in the year 2020. However, despite facing intense competition from Walmart, Google, and Microsoft, the company namely Amazon remained in the league of their own. Furthermore, eBay is a significant competitor of Amazon who is behind Walmart. It is forecasted that Walmart will beat eBay in the race to become 2nd online US seller. SWOT Analysis Amazon indicated that they have more than 150 million paid prime members globally. The prime members are the key to help Amazon fend off their rivals such as Walmart as these members are interested in the company’s products. The reason is that employees of the company are interested in the two-day shipping offers besides free entertainment from the Prime video. It is seen that the rivals of the company, namely Microsoft, and Google are interested to steal AWS’s share and the corporations watch their spending against the uncertain economic impact of the pandemic. Prime members continued to order frequently and in large basket sizes. It is seen that the company has accelerated growth of the prime in the US and in overseas. In this way, the Amazon competitors such as Microsoft, and Walmart, has been dealt with.
Walmart and its Challenge
Walmart is among the top Amazon competitors who provides its products to its customers at lower prices and provides a big selection of products. This competitor of the company is responsible for more than 10% of the retail sales in the US. Most customers think of Walmart as a huge retail store, but it plays the online game very well and its online presence is growing each year. However, Amazon provides convenience- making life easier and saving time for the customers. In addition to the selection, and low prices, Amazon provided convenience to their customers. By creating the Dash button and many other commodities which is about convenience, the company has competed with Walmart. It has also added a new weapon in its plans known as ‘being anticipatory’ to compete against its rivals. The rivals of Amazon namely Apple have mastered the anticipation art. Through innovating and anticipating, Amazon’s rival namely Apple has competed in the marketplace. Furthermore, Walmart does not compete against Amazon and follows their risk as well as takes action through the usage of solid trends to shape the future. It is seen that the company does not imitate their competitors.
Shopify Growth in the Market
According to Forbes, Shopify is a major Amazon competitor. They provide services that the small and medium-sized firms use to function their websites. In terms of the fulfilment and delivery system, Shopify challenges and competes against Amazon. Shopify spent $450mn to acquire the 6 River system, which is a warehouse automation system that has a presence of robots as well as artificial intelligence. So, Shopify made a deal to compete against Amazon. If Shopify can build a fulfilment system that can effectively compete with Amazon, more customers will switch from Amazon. Furthermore, Shopify was exhorting their consumers to compete against Amazon directly. As a result, there is the inevitability of the fact that some company other than Shopify will destroy the stronghold of Amazon in the marketplace.
By Fortune, the online market of Walmart has a new partner namely Shopify to better contest with Amazon in e-commerce wars. It is seen that 12,000 companies which sell online using the technology of Shopify will be capable to attract customers of Amazon in the US. The combination of the two companies will let the appropriate sellers of Shopify list its items seamlessly on Walmart. As a result, the customers of Walmart get access to a wider assortment. In this way, the company namely Amazon faces tough competition from Walmart which is positioned at no. 2 in the US eCommerce market. In the case of the competitor namely Shopify, the deal will help to provide their sellers with a huge probable client base such that sellers do not need to turn to Amazon. As a result, Shopify has transformed from a Canadian tech company to a major Amazon competitor with a market cap of $100 billion. Shopify’s expertise in multichannel commerce in combination with the reach of Walmart will allow developing online shopping experience for the merchants. In this way, Walmart and Shopify are growing in the market and thereby posing a challenge to Amazon.
Rivalry with Google
In accordance to BBC, Amazon's biggest rival is Google. The company namely Google is amid the probe of the European Union into their search engine after the anti-trust complaints. In the year 2014, Amazon bought a live stream game network for $970mn. Despite Amazon competitors like Google holding a dominant position in the marketplace, they were wary of the development of ‘next google’. Persons do not contemplate Amazon as a search engine, however, people looking to buy various products search in Amazon. In accordance to BBC, Apple and Amazon are the two biggest rivals in the marketplace. The competitor namely Apple is a tech company that is a favorable customer brand. Its products includes some must-have gadgets and customers have a desire to pay for their products rather than cheap alternatives. Despite providing distinct services, and products, they are technology firms that make for the best performing technology stock in the market. In comparison to Apple’s high price of their products, Amazon has lower-priced products and thereby more customers shop from this company.
The Big 4 and Competition
Amazon’s competitors such as Facebook, Google, and Apple are alleged to use their control to defeat their competitors. Amazon indicates that the world needs big firms whereas its competitors argue that their companies had spurred innovation. The market where the above companies compete is competitive and is considered as intense in acquiring the market share in the smartphone business. Forbes has also mentioned that the competitor namely Walmart dominates in the physical stores, whereas Amazon dominates in the online platform. It is forecasted that Amazon will face tougher competition from Walmart in the future as both companies tighten their online retail and in-store services. In recent years, Amazon and Walmart fought with each other with many of their similar customers.
The major competitors of Amazon are Alibaba, Apple, eBay, Walmart, and Shopify. Amazon’s operations management remained in its league despite facing huge competition from Walmart. The Prime memberships help Amazon to fend off their rivals such as Walmart as more customers are taking subscriptions of Prime. The integration of Walmart and Shopify poses challenges to Amazon as it can result in a fall in the number of customers of Amazon.
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