 "The stage is set for the Amazon vs Alibaba battle in Southeast Asia")
A momentous battle over Southeast Asia’s online shoppers looms. On one side, there’s US-based Amazon, the granddaddy of internet shopping sites, and in the opposite corner is Chinese heavyweight Alibaba. Both are formidable in their home markets and are looking for fresh ground to conquer.
Alibaba, owned by billionaire Jack Ma, has been making aggressive moves in Southeast Asia, while Amazon is reportedly planning a debut early next year.
Amazon, started by Jeff Bezos, sells goods direct to consumers with a markup and keeps inventory in its network of warehouses.
Alibaba’s business, on the other hand, is online marketplaces. Over the past few years, Amazon has been shifting toward an open marketplace where it takes a cut of sales. Many sellers can store goods in Amazon warehouses, allowing for quick shipping to buyers.
With the two accounting for a huge chunk of ecommerce in their home markets – Alibaba is 80 percent of China’s online shopping sales; Amazon, 60 percent of the US’ – the next logical step was international expansion.
Then there’s India, where Amazon competes fiercely with Alibaba-backed Paytm and Snapdeal, and another major player, Flipkart.
Deep pockets
While Amazon only makes money from its store, Prime, and AWS, Alibaba has strength through diversity, pulling in cash from ads, some commission, and gains from its many investments.
Overall, Alibaba already has the upper hand in Southeast Asia thanks to its connections and investments, but Amazon isn’t a contender you’d take for granted. With both possessing expertise in ecommerce and logistics, massive economies of scale, and deep pockets – it’s going to be a bloodbath.
This is an excerpt from Tech in Asia. You can read the full article here
