Platforms like eBay and Alibaba and retail stores like Target and Walmart generate a sizeable number of customers and revenue. Becoming a successful e-commerce platform entails having an active community presence, going omnichannel and to different marketplaces, and having a good loyalty program.
I had my fair share of purchases (sometimes impulse buying) on the largest e-commerce platform today, Amazon. Since 1994, Amazon has generated a lot of buzz.
As the brainchild of Jeff Bezos, Amazon has changed many industries, including e-commerce, digital streaming, and cloud services.
But Amazon is not the only fish in the sea. Numerous companies compete with Amazon and generate sizable revenues by offering various goods.
With this post, I’ll let you dive into the different competitors of Amazon. I’ll also share some strategies to become one of Amazon’s top contenders.
How Does Amazon Generate Income?
Amazon is the top-ranking large-cap e-commerce company in the world, with a market worth of more than $1 trillion. But you might ponder, “How does Amazon become number one?”.
To answer your question, here are three key avenues Amazon generates its revenue:
Amazon started mainly as an e-commerce platform. Over 1.9 million sellers and over 300 million active customer accounts globally exist.
During 2022’s third quarter, Amazon’s net sales rose by 15% to $127.1 billion from $110.8 billion. And it is highly suggested that Amazon’s retail e-commerce sales will total $746.22 billion globally in 2023.
Amazon does this by competing with all different types of businesses worldwide. The platform also provides various product categories, service options, and delivery mechanisms.
Amazon’s subscription services rake up the most negligible revenue for the company.
U.S. Amazon Prime subscribers average monthly spending of $51 to $100. Subscription services cover access to material, including audiobooks, digital video, e-books, and music, and membership costs for Amazon Prime.
Amazon Web Services (AWS)
Amazon Web Services is the second-highest revenue-generating channel of the company.
AWS’ net sales revenue reached its highest level of over 469 billion dollars in 2021. Services include global computing, storage, and database services for both commercial and group.
Customers are charged according to the number of services they receive. For example, the storage capacity is given on demand, database, or computed services, and customers pay for a set quantity or duration.
10 Amazon Competitors
You may find a balanced mix of online-only business models and offline/online offerings in the Amazon competitor list. They are all worthy competitors, thanks to their distinctive advantages.
The main Amazon rivals are listed below:
AuctionWeb, or eBay as we now call it, started on September 3, 1995, and is headquartered in San Jose, California.
eBay had $2.4 billion in revenue in Q3 of 2022. The corporation also bought a central technological platform for collectibles and one of the biggest online marketplaces for trading card games, TCGplayer.
But when you look at the two e-commerce platforms, you may find that the two share similar goods.
The main distinction? Products can be auctioned off on eBay or sold at a set price.
eBay has a distinct advantage over Amazon since it operates more like a giant yard sale than a marketplace.
As a result, the retail and auction website has become a consumer internet and online services company. eBay also has the most outstanding market value internationally, more than 20 years after its founding.
Alibaba Group, a Chinese multinational corporation founded in 1999 by Jack Ma, operates through several companies. However, the most notable of these businesses is Alibaba.com.
Alibaba.com is the B2B (business-to-business) marketplace. Like Amazon, Alibaba lets retailers buy products in bulk and resell them for profit.
But Alibaba neither owns the listing nor is it in charge of the transportation or storage of purchases.
Businesses can access producers of various products directly through Alibaba.com. Therefore, avoiding intermediaries and saving money on unit costs.
And although it’s prevalent in China, you can get lucky and find vendors in the U.S.
Moving closer to the idea of a bargain department store, Walmart is another excellent illustration of an Amazon rival. Sam Walton established Walmart in Rogers, Arkansas, in 1962.
Amazon and Walmart are constantly at odds with one another. Generally, Amazon leads online, while Walmart rules the real world.
But the two companies face off against one another in every area, including innovation, digital growth, logistics, and sustainability. However, Walmart’s primary focus may still be on physical stores to ensure that its online presence keeps expanding.
Walmart generated an enormous income in 2022 of $572.8 billion. It’s also worth noting that Walmart garnered $73 billion in net sales for its e-commerce business.
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Target was established in 1962 in Minneapolis and currently has 1,948 physical stores. The American chain of retail stores presently holds a 350,000-person workforce and the sixth-place brand position in this market.
Target may be a lesser-known brand, but the company excels at cultivating a devoted following. That’s why Target has a good chance of taking on Amazon.
Target’s e-commerce combines local, drive-up, and ship-to collection options. Other than the physical stores, Target has its e-commerce website.
By revamping ToysRUs.com and adding a Disney microsite, the company is refocusing resources on the eCommerce market. In turn, Target’s annual revenue was forecasted to be $22,006 million in 2022.
Amazon is regarded as a behemoth in the U.S., but the Rakuten Group is its fiercest rival in Japan. Rakuten was founded in 1997, offering online shopping, banking, payments, investment, and even streaming (Rakuten TV).
Rakuten relies on an entirely different economic strategy to support its expansion. It offers a cash-back program to entice customers to purchase its products on Rakuten rather than directly from brands.
That’s why the U.S.-based cash-back service Rakuten Rewards saw an increase to 22.3 billion yen in Q3 FY2022. On the other hand, Rakuten Group’s domestic e-commerce division brought in about 712 billion Japanese yen in revenue for 2021.
To expand internationally, Rakuten has also purchased several businesses.
It bought Buy.com in the U.S. in 2010, France’s PriceMinister, and Play.com in the UK. All three firms’ websites now lead to Rakuten’s official web pages.
Additionally, the platform operates in two market niches.
First, Rakuten helps consumers who independently seek goods and services online. Second, the company allows merchants who require customers or buyers to sell their goods.
Rakuten works with cutting-edge features like personalization, lower costs, and risk reduction, giving merchants a more powerful brand position.
6. JingDong (JD)
Next on the list of Amazon competitors is JingDong (JD) (JingDong), a Chinese e-commerce platform established in Beijing in 1998. JingDong is famous for its successful B2C operations and robust logistics setup.
It competes with Amazon and Alibaba since both allow customers to purchase things in bulk. JD’s strategy includes using luxury goods as the key differentiator and positioning itself as the nation’s most dependable retailer.
At the end of 2021, JD’s e-commerce platform had approximately 569.7 million annual active customers. Plus, JD’s revenue at the end of September 2022 was $34.236 billion.
In Europe, Otto is one of the biggest online retailers. The company, established in 1949, began as a German mail-order business before becoming an internet retailer in 1995. As a result, making it Amazon’s oldest competitor.
Otto is now regarded as a one-stop store for various consumer goods. In the fiscal year 2021-2022, Otto generated 5.1 billion euros in revenue.
The Otto group rose as Germany’s second-most profitable retailer in 2020. Otto’s connections with top retail brands and superior customer service are responsible for its success.
Otto’s most significant market share is in the furniture and home furnishings industry. But it also carries top-name apparel, electronics brands, and sports equipment.
Although Newegg, founded in 2001, is neither eBay nor Amazon, the company is a significant player in the electronics market. Newegg offers a large selection of products at reasonable costs, from laptops to cameras.
Additionally, the company provides Newegg Marketplace. The platform enables various businesses to connect with millions of shoppers across more than 50 nations.
Flipkart, one of India’s most well-known e-commerce companies, provides an extensive range of product categories.
The company offers furniture and electronics to fashion and electronics to gardening supplies. Also, the 2007-founded business competes with Amazon through customer service, product selection, incentive programs, and price.
Additionally, Flipkart offers a unique Plus SuperCoins reward program that enables customers to accrue points for their purchases. You can exchange the coins for more savings vouchers, entertainment deals, and other items.
For those looking to buy or sell handmade and vintage goods online, there is Etsy. The platform began in New York in 2005 and now serves people worldwide.
Etsy’s business model is built on three things:
- Fees charged by third-party payment processors
- Commissions for sales transactions
- Other services provided by those who sell
The e-commerce platform’s strategy generated $2.3 billion in 2021.
How Small Businesses Can Rival Amazon
You’ve definitely wondered at least once as a small business owner, “How the hell can I compete with Amazon?”. Amazon likely controls a sizable portion of your market share if you operate an online store or even physical stores that cater to a specific niche.
Strive for Excellent Customer Service
Treating your consumers as persons rather than just reference numbers is one of the major benefits small businesses have. Plus, when compared to Amazon, small businesses have a distinct advantage in terms of customer service.
Small businesses are more likely agile and can afford to get personal, frank, and imaginative with their customer service. Simple strategies for producing positive client experiences include:
- Include handwritten messages of appreciation with your orders
- Directly address them and request their opinions
- Send relevant, customized emails
- Solve client problems promptly with meaningful resolutions
Going omnichannel applies to both physical and online-only retailers. Having an omnichannel experience is crucial for winning new business and keeping hold of current clients.
In addition, having an omnichannel approach has the following advantages:
- Boosts operational effectiveness
- Enhances sales
- Makes inventory turnover better
Create a Loyalty Program
A really simple loyalty program is another method to compete with Amazon. You can consider a range of different loyalty program types depending on the type of business you operate.
- Paid ( “plus” or “premium” members)
- Gamified programs
- Value-based programs (tree-planting programs)
Have an Active Community Presence
Nothing is more effective than a vibrant community. All of the major e-commerce businesses initially made their riches in this manner.
Successful companies created a vibrant, engaged community around their goods and services. And small businesses like yours may also do this.
Putting money into community development will help you attract more clients and transform them into brand advocates. Building a list of email addresses is crucial in this approach because it enables you to contact them frequently.
Introduce Products to Other Marketplaces
You can use online marketplaces other than Amazon and sell directly from your website.
Using other marketplaces is the best approach for smaller brands in niche markets. Shoppers already use these platforms to conduct online transactions, so you’ll have an instant audience.
Amazon’s Secret to Success
If you have an online store, you must accept that you compete with Amazon. Generally, Amazon is a well-diversified business that enjoys the benefits of numerous lucrative revenue sources.
The company may initially terrify new e-commerce platforms. However, your business’s size and industry are irrelevant.
Plus, Amazon sells everything. In other words, Amazon isn’t slowing down anytime soon.
But the truth is that you can outperform Amazon by developing distinctive products and valuable, individualized purchasing experiences.
Enjoyed reading this post? Check out these e-commerce and business articles:
- How To Set Up Your E-commerce Business From Scratch
- Simple Amazon SEO Guide for 2023
- How to Build a Profitable Business
Don’t forget to drop a comment below with your thoughts about the Amazon competitors I listed.