Alibaba will give Amazon a run for its money



Opinion columnist Sam King writes about Chinese e-commerce group Alibaba and their recent success on the Chinese Holiday Singles' Day. King believes that it will only be a matter of time before they join the U.S. market.

SAM KING, Opinion Columnist

Singles’ Day is a Chinese holiday observed by young people to celebrate being single. The last Singles’ Day, Nov. 11, was a record-breaking day for the internet giant Alibaba. It was so big that it smashed sales records across the world. It even dwarfed Amazon’s biggest weekend, but there’s still doubt about whether or not they’ll come to the US.

Alibaba is a big deal, but there’s a lot of Americans that don’t know what this company is. Many refer to it as “the Amazon of China,” but that’s not accurate. While Amazon is the closest comparison possible to Alibaba, there are still some significant differences that need to be recognized.

One of these differences is how Alibaba works. Amazon, as we all know, has massive logistics and distribution channels to get products from point A to point B. According to Shopify, Alibaba instead uses a model where customers ship to other customers using 3rd parties to move the product. This creates a “middleman” problem, as many sellers of products on Alibaba are actually just reselling someone else’s products.

Alibaba is the world’s largest ecommerce group on the planet. They have pretty much everything on their platform from cloud computing, electronic payments, news media, film, retail, digital media and more. There was even a time they tried to sell Uranium. They really do have everything.

Amazon by comparison, isn’t very big. If eBay and Amazon were to combine, they would still be smaller than Alibaba. The scale of their company is unrivaled. It makes sense for them to hold the record for the biggest sales day.

30.8 billion dollars in sales on a single day. To put this into perspective, Amazon’s last Black Friday weekend including cyber Monday was around the 14 billion mark. Alibaba made 1 billion dollars in the first minute of Single’s Day (Verge). That’s insane. It’s more than enough to prove that Alibaba doesn’t need the U.S. in addition to their current market, but will they ever come over to the US?

This won’t be a question of whether or not Alibaba comes to the US, it’s a question of when. This new record is good news for the company. A 30 billion day is more than a lot of companies make in a year. On top of that, most of those sales were just the Chinese market. It’s clear Alibaba doesn’t need to go to the U.S., but it’s a huge market they have yet to tap into.

Fortunately, we don’t have to speculate too much. According to Bloomberg, Alibaba has retracted its plans to break into the US market amid the current tariffs on China. They planned to bust into the market, challenge Amazon and bring 1 million jobs to America.

While I’m sure Alibaba could adapt well to the US with some effort, I’m sure the added tariffs make it difficult. I wouldn’t count them out as a future contender, however. The U.S. market is lucrative and could bolster Alibaba’s profits even further. When they do decide to enter the market, things are going to change for us.

Many fields, including digital media, would be changed by Alibaba’s entry into the US. They own and operate in so many areas, it would be silly for them to not continue to do the same here. They are a true Internet giant that is more than a match for Amazon. Imagine what would happen if the two of them went head to head.

Ideally, good things would happen. I don’t think either company is going anywhere anytime soon. Some competition would be good for both of them and the consumers. I think that’s the real good news here.

The recent allegations against Amazon mistreating their workers and some of the scandals surrounding the mass counterfeit scams operating on Alibaba proves that uncontested giants of commerce need something to keep them in check. If the government won’t do it, the next best thing is introducing competition. That way, customers can choose to take their money elsewhere.

While it’s clear Alibaba can sustain itself without going into the U.S. market, this Single’s Day boom proves that, they will still likely try once the opportunity arises. Once that hits, it will be interesting to see how Amazon reacts.