Alibaba and JD are the e-commerce giants of China. They have been in operation for over a decade, yet it seems that shifting consumer trends have each of them vying for the top spot. Although, online finance site Bezinga thinks that China’s retail market is large enough to bear both of the online giants.
Whether or not you’ve set foot on Chinese soil, chances are you’ve heard of Alibaba. According to Inc Magazine, Alibaba delivers around 57 million parcels daily and is one of the biggest internet companies in not just China, but the world. While their conglomerate takes 54% of the B2C market, the platform consists of largely of third-party sellers. All things considered, it has been liked to the American E-bay. Since they have less opportunity to control the goods passing through their network once the third-parties are involved, they have seen a rise of counterfeit items. Through technology they have been trying to crack down and prevent the exchange of such goods.
JD has been dubbed the next Amazon of China over and over again by business publications and analysts alike. According to Forbes, 70% of their business is derived from B2C sales. Although they do have the platform for third-party sellers on their site. Sounds a lot like Amazon doesn’t it? Most of their sales come from selling electronics directly to consumers which attributes to their low-margin, high-volume business model. The direct selling approach seems to have a slight advantage as buyers in the marketplace feel they can trust them as Chinese counterfeit products run rampant. Surveys of Chinese consumers have found roughly 20 percent of participants, “prefer a direct sales model such as JD’s to a third-party marketplace like Alibaba.”
Investopedia states that while both Alibaba and JD do have overlap, they are completely different business models. In a nation like China, and even Asia as a whole, there is plenty of room for the both of them. As we’ve seen with Amazon, E-bay and others in the U.S, there’s plenty of market share to go around. Then again, nothing drives a company quite like a little healthy competition.