Who Are Amazon’s Competitors and How to Compete With Them
As an online retailer, it’s important to know who your competitors are and how they might be selling similar products to you. This is especially true for Amazon, which has a huge market share. In this blog post, we’ll tell you who are Amazon’s competitors and give you some tips on how to compete with them.
I remember when I first started selling online; I had no idea who my competition was or what they were doing. I quickly learned that if I wanted to be successful, I needed to understand the landscape I was operating in. And so began my research into Amazon’s competitors. Since then, things have changed quite a bit and there are now many more options available for those looking to sell online.
However, one thing remains the same: if you want to succeed as an eCommerce seller, it’s essential that you understand your competition – particularly if one of them happens to be Amazon! So, who are Amazon’s competitors? Let’s find out!
Who Are Amazon’s Competitors?
Amazon is likely to have a significant portion of the market for retailers who are online or operate in a niche market.
Jeff Bezos’ brainchild, Amazon, is involved in many areas, although it isn’t invulnerable.
Many businesses are profitable even though they directly compete with one another.
eBay, another massive online retail platform, is a direct competitor to Amazon.com. Founded in 1995, the company is based in Silicon Valley.
In 2020, Ebay’s revenues were the best they have been in 5 years. However, this is still far less than the $25.8 billion they earned in 2013.
Like Amazon.com, you can find great deals on products from third-party vendors on eBay. It’s also a great place to buy and sell items.
The biggest difference between eBay and Craigslist is that sellers on eBay can list items at a fixed price, or they can run an auction.
While eBay does offer auctions, Amazon.com does not.
While Amazon has more of a “marketplace” feel, where sellers can list their products and buyers can browse, sell, and buy, on eBay, the seller sets the price, and the buyer bids.
Founded in 1962, Wal-Mart is a multinational retail corporation with headquarters in Bentonville, AR. The company focuses on selling discounted general merchandise and competes with the likes of Amazon.com.
Amazon has the lead in online sales, but physical stores like Wal-Mart still dominate.
While both Wal-Mart and Target have been competing for the same customer for 30+ years, they now fight on more fronts than ever before. From innovation in retail to sustainability, these two brands are battling it out for the top spot.
In 2020, Wal-Mart made $524 billion in revenue, which was $138 billion dollars more than what Amazon.com made in that same year.
While you may know that Amazon has a massive presence in the western world, you may not know that in India, one of the largest countries in Asia, there is a competitor called Flipkart. In 2018, it was acquired by the retail giant, Walmart.
Flipkart has a similar business model to Amazon but with the exception of the Flipkart Plus SuperCoins reward scheme. With this scheme, you earn rewards instead of paying for them as you do with Amazon Prime. This makes Flipkart a big competitor for Amazon in the region.
Flipkart has seen a 12% increase in revenue from the previous year, as the Indian ecommerce market continues to grow. This makes Flipkart one of Amazon’s biggest competitors in the region.
Another company with a long history is Target, which was founded in 1962, the same year as walmart. It is well known for its range of products and for always having the lowest prices.
The retail chain, which sells everything from clothing to home goods, has locations all over the country. 75% of all Americans live within a 10-mile radius of a Target store.
In 2020, the company reported $93.6 billion in overall retail sales, a 19.3% increase from 2019.
What sets target apart from other big-box stores is its loyal customer base.
Target has gained immense popularity among shoppers for its convenience and affordable prices; it is often considered an acceptable destination for a date night.
With services like same-day delivery and in-store pickup, it’s no wonder that more and more people are turning to target for their shopping needs. However, while it’s growing, it’s nowhere near the size of amazon.
Alibaba Group is a Chinese multinational conglomerate specializing in e-commerce, retail, Internet, and technology. Founded in 1999 by Jack Ma, Alibaba Group’s main subsidiaries are AliExpress, Taobao, and Tmall. While Amazon is a giant in the US, Alibaba Group is its equivalent in China. Jack Ma has seen controversy for comments he has made against the Chinese regulatory system.
Each of Alibaba’s subsidiaries competes against each other in different markets. For example, Tmall, a B2B (Business to Business) platform, sells products to other businesses.
Alibaba is one of the biggest eCommerce platforms in the world and competes with Amazon Web Services in the cloud computing market. Alibaba’s cloud revenue for the three months ending September 30 was $2.24 billion, a 60% year-on-year increase.
While both Amazon Web Service’s and Microsoft Azure’s revenue rose by 29% and 48% respectively, Google Cloud Platform’s revenue growth was faster, at 101%.
The 2020 annual revenue of the Alibaba group was approximately $109 billion dollars. In 2019, the retail eCommerce market share of the Alibaba group was 55.9%.
Founded in 1949, the Hamburg-based e-commerce giant, otto.de, is the oldest on the list. Originally, customers would order products by phone or mail before otto ventured into online retail in 1995.
While Amazon is a one-stop-shop for electronics and sports equipment, its biggest market is furniture.
As of 2020, the Otto Group is the second-largest online retail company in Germany, behind Amazon. The company reported €15.6 billion in total revenue in 2020.
JD.com is a Chinese ecommerce sales website that was founded in Beijing in 1998. It is the next competitor on our list.
Other than Amazon, Alibaba is also a direct competitor to Tmall, as they are both Chinese B2C ecommerce companies.
Amazon and Jingdong are two very different companies. While they both sell products, they differ in that Amazon has more of a focus on individual purchases, while JD focuses on bulk orders.
As a result, JD.com’s revenue increased by 29.3% in 2020, amounting to a total of $114.3 billion. This is significantly more than what Alibaba made in the same year, proving JD.com’s dominance in the market.
Netflix, the video-on-demand service that was founded in 1997, started when its founder, Reed Hastings, and co-founder, Marc Randolph, sent themselves DVDs in the mail.
With 208 million paying subscribers, 1.5 new titles released every day, and $25 billion in revenue, it’s no surprise that Netflix is a household name.
While Netflix’s share of the US streaming video market has shrunk in recent years, it’s still got 20%.
Founded in 1997, a Japanese company, Rakuten, is a major player in the e-commerce industry.
However, Rakuten is more than just an ecommerce company—its ecosystem includes a streaming service (Rakuten TV), banking and payments services, telecoms, and even health, and life insurance. By offering such a wide range of services, Rakuten has become a one-stop shop for many consumers.
As Rakuten’s business model is different from other retail stores, it offers customers cash-back rewards to encourage them to shop through Rakuten instead of with brands directly.
Rakuten’s cash-back system and enterprising ecosystem have resulted in a net revenue of 1.5 trillion Japanese yen (over $13.6 billion) and 15.2% YoY growth in 2020.
What Is Amazon’s Competitive Advantage?
Few retailers can compete with the all-in-one solution that Amazon has as an online retailer.
Though you may not have a lot of money to invest in Amazon ventures, you can feasibly make money from limited funds. Amazon’s competitors cannot hope to match this advantage. Additionally, Amazon offers other benefits that contribute to its competitiveness, such as:
A Wide Selection of Products
Amazon has a wide selection of products, with nearly 2 million small businesses supporting its platform. This allows them to have 32 different product categories, each with numerous subcategories. This makes it easy for customers to find exactly what they are looking for.
The vast number of subcategories available on Amazon gives new sellers a much higher chance to rank for their desired keywords. This also helps customers find the specific products they need with greater ease and convenience. Overall, this makes Amazon a great choice for online retailers.
If you want to sell products online, then knowing which product categories are most popular on Amazon is a good place to start.
Amazon has a wide selection of products, with over 350 million in the marketplace. Almost 340 million of these come from third-party sellers, so you’re sure to find what you’re looking for.
Prime Shipping Increases Sales Potential
One-day shipping is a powerful tool that meets many of the immediate needs that customers have. With over 200 million people enrolled in Prime, Amazon dominates logistics.
With Amazon Prime, customers can have their orders shipped within 2 days. This fast service fulfills many of the common needs of consumers.
While it might not be the same as just taking it home, many people appreciate Amazon’s one-day delivery feature. This can dramatically increase your conversion rate.
Amazon FBA is a great way to outsource your shipping and warehousing. This allows you to focus on other aspects of your business while leveraging Amazon’s robust logistical chain.
Great for Entry-Level Sellers To Start
Amazon is a great place to start selling if you have an eCommerce background. With over 1.6 million packages sold, mostly from third-party sellers, it’s easy to get started and find success on the world’s largest online marketplace.
The number of users on Alibaba has grown 50% in 2017, and it’s easy to see why. The sign-up process is quick and simple.
Other companies make you jump through hoops to get started, but on Amazon, anyone can start a business with just a few clicks. You don’t need an EIN or a specific business address – you can start selling right away!
Robust Advertising Features
Display advertising, influencer advertising, and video-based ads can now be used to compete more effectively on Amazon because Amazon has Amazon Web Services and Amazon Seller Central.
Amazon’s advertising and affiliate networks are unrivaled in their ability to track a customer’s journey from start to finish. This, combined with the fact that Amazon consistently ranks among the top companies in terms of technology, makes it a force to be reckoned with in the world of advertising.
Another cool thing about the Amazon platform is that its system is designed to save you money. So, if the second-highest bidder is 10¢ below you, you will be 1¢ above that.
Amazon’s extensive website portfolio provides ample opportunities for retargeting ads. So, if someone visits your listing but doesn’t purchase anything, you can target them with ads on other Amazon websites. This is much simpler than targeting potential customers on other Ecommerce platforms.
Amazon Controls eCommerce
Amazon has 40% of the online retail market, leaving 60% for all other retailers.
Amazon is absolutely dominating the eCommerce world and is only expected to grow even more in the coming year. There’s really no competition that can touch them when it comes to effectiveness and reach.
Amazon marketplace is the top online market provider for a reason. Their size and scale give them an unparalleled advantage over any other competitor. No matter how hard they try, none of the competition can keep up with Amazon.
It is tough to compete with the likes of Amazon.com.
Despite being one of the top online providers of retail products, Amazon has some intense competition to work against.
Amazon’s Competitors In Artificial Intelligence
Amazon’s AI services are not only limited to AWS but also power its virtual assistant, Alexa. However, it faces tough competition from Apple and Google who both have their own virtual assistants.
The Google Assistant is a voice-controlled assistant that is available on a variety of devices. It is currently one of the market leaders, alongside Apple’s Siri, with 36% of the market share. The Google Assistant can be used for tasks such as setting alarms, adding calendar events, and sending messages.
The Google Assistant is a great choice for users who are looking for a more general focus, while Amazon’s Alexa is perfect for those who need help with day-to-day tasks and can also place orders from Amazon using just voice commands.
Even though it’s only available for the iPhone, Apple has still managed to stay on top with its popular voice assistant, Siri. Two factors have helped it maintain its lead – it is only available on the iPhone, and it is also tightly integrated with the iPhone.
Siri has a lot of features that are very helpful. It can do things such as set alarms, schedule meetings, and even answer questions. Siri is also constantly improving with each new iOS release.
Only in late 2019 did Google Assistant manage to get to equal footing with Siri. Both now hold the first spot with a market share of 36%.
Amazon’s Competitors in Digital Distribution
Amazon is a global leader in e-commerce and cloud services, but it also has its own digital distribution service in the form of Amazon Prime Video and Amazon Prime Music. In addition, Amazon Studios produces original content for film and television.
With 158 million monthly viewers, Netflix is the top dog for online streaming.
Netflix has been the top digital distribution service for a while now due to its great selection of original content and various TV shows and series.
Both Amazon.com and NetFlix.com provide similar online streaming services.
Netflix has been in the market for over 20 years, while Amazon only started their Prime Video service in 2007. Netflix also has a much larger user base, with over 100 million users compared to Amazon’s Prime Video service which only has a fraction of that.
Both Amazon and Netlfix have their own movie and television studios that are exclusive to their platform. Both companies spend billions of dollars each year on improving their respective platforms and on producing new content.
While both companies have continued to grow, it’s unclear how long it will take for Amazon Prime to catch up with the streaming giant that is Netflix.
Spotify is a great way to listen to your favorite music. With millions of songs, albums, and playlists, you’re sure to find something you love.
In 2019, 36% of internet users were using streaming services like Apple Music and Spotify.
While both services offer both paid and free options, it’s clear which service has the edge.
Spotify was introduced in 2006 as a way to stream music online, and it became more popular than Amazon Music, which was introduced the same year.
While Apple Music and Pandora have dominated the market, Amazon has still managed to gain ground in the online music industry.
The quick growth of Amazon can be attributed to the fact that their Prime Video and Music service are bundled with a single Amazon Prime subscription. This subscription also offers various other features and services which have helped them grow so quickly.
Amazon’s Competitors in Grocery
In 2017, after acquiring Whole Foods, Amazon.com, ventured into the grocery and department stores business.
The in-store sales growth has been slow in the past few years, but it is gradually catching up to the big-name players of the physical retail sector.
Before it bought Whole Foods Market, Amazon has only held a small share of the market. Now, however, it’s risen to 3.1%.
In the online shopping world, Amazon has dominated the market for years. The closest competitor doesn’t even come close to their market share.
While Walmart poses a larger threat to Amazon in terms of online grocery sales, Kroger has shown serious growth year-over-year, making it a potential threat to Amazon.
While Kroger has an impressive $1.5 billion in revenue from online sales, it pales in comparison to giants like Wal-Mart and Amazon.
Kroger’s year-on-year growth figures have been impressive, with a 64% increase in sales from 2017 to 2018. The company has managed to maintain a steady growth rate since then, making it a worthy competitor to Amazon in the grocery sector.
This puts Kroger in competition with, Amazon.com, in the grocery store industry.