Amazon.com has been making waves since 1994. From ecommerce to digital streaming to cloud services, the brainchild of Jeff Bezos has revolutionized a number of industries. However, Amazon is not the only fish in the sea. Plenty of businesses operate as Amazon competitors and make huge profits selling different things.
Today, we’ll look at some of Amazon’s direct competitors in various areas, explaining how exactly they attract customers, despite having fewer resources. Then we’ll take those lessons and look at how your small business can also compete with the online retail giant.
Top 8 Amazon competitors
1. eBay
eBay is a huge ecommerce platform that directly competes with Amazon for online sales. While eBay’s revenue has taken a hit in recent years, in 2020 the company saw its best net revenue since 2013—$10.2 billion.
With eBay, retailers list products for sale and consumers buy them in the marketplace. You’ll also find eBay sellers offering products similar to those offered by retailers on Amazon. The key difference being eBay sellers can auction items or apply a fixed rate.
With the ability to bid on products and the ease of connecting with sellers, eBay is a top site for buying electronics, clothes, cars, collectibles, and other products. It also ranks higher than all other Amazon competitors in terms of website visits, with over one billion visits each month, on average.
2. Alibaba Group
Founded in 1999 by Jack Ma, Alibaba Group is a Chinese multinational company, with different subsidiaries operating under the parent firm, the main ones being Alibaba.com, Taobao, Tmall, and AliExpress.
Alibaba.com, a B2B (business-to-business) marketplace, is the flagship subsidiary of the Alibaba Group. It competes with Amazon for retailers looking to buy products in bulk and resell for a profit. Alibaba.com provides businesses with direct access to manufacturers of different goods, helping them avoid middlemen and save on unit pricing.
Taobao, Tmall, and AliExpress are B2C (business-to-consumer) ecommerce operations. These companies compete with Amazon on selling electronics, clothes, accessories, and gadgets at low prices.
Collectively, the Alibaba Group brought in revenue of $31.14 billion in Q3 2021, an increase of 29% year over year.
3. Walmart
Walmart is a global retail giant with over 11,000 physical department stores across 27 countries. It competes with Amazon’s retail subsidiaries (such as Whole Foods and Amazon Books) in various locations, offering a wide range of products at everyday low prices.
While Amazon dominates the ecommerce space, Walmart has a fast-growing online presence. According to Jungle Scout’s 2021 Ecommerce Report, consumers prefer shopping for groceries and essential items on Walmart.com, which leverages thousands of physical Walmart stores across the US to offer familiar brands and easy pickup/returns.
Walmart saw a worldwide ecommerce revenue of $75 billion in 2021, which was $35.3 billion more than it saw the previous year.
4. Rakuten
While Amazon is considered a titan in the US, in Japan it faces tough competition from the Rakuten Group. Founded in 1997, Rakuten’s ecosystem of services includes online shopping, banking and payments, investment and incubation, and even a streaming service (Rakuten TV).
As an Amazon competitor, Rakuten relies on a significantly different business model to fuel its growth. It uses a cash-back program to encourage shoppers to buy its products on Rakuten instead of directly through brands. This strategy earned it a net revenue of over $13.6 billion in 2020.
Additionally, Rakuten has acquired several companies to establish an international presence. In 2010, it purchased buy.com (US), followed by acquisitions of play.com (UK) and PriceMinster (France). The websites of all three companies now redirect to Rakuten’s official sites.
5. Otto
Otto is one of the biggest ecommerce companies in Europe. Founded in 1949, the company was originally a mail-order service in Germany before it evolved into an online brand in 1995. Today, Otto is considered a one-stop shop for a wide range of consumer items.
In 2020, the Otto group became the second most profitable retailer in Germany (after Amazon). Its success can be attributed to its excellent customer service and partnerships with leading retail brands.
Otto’s biggest market share is in furniture and home furnishings, though it also stocks clothing, sports gear, and electronics from leading brands.
6. JD
The next Amazon competitor on our list is JD (JingDong), a Chinese ecommerce website founded in Beijing in 1998.
JD is renowned for its B2C operations and robust logistics infrastructure. As of September 30, 2021, the company had a network of approximately 1,300 warehouses spanning roughly 23 million square meters in total.
Beyond being a competitor to Amazon, it’s also a direct competitor to the above-mentioned Alibaba.com website, as both companies offer the ability to buy items in bulk. In 2020, JD experienced $114.3 billion in revenue, which was more than Alibaba’s $109 billion sales that year.
7. Flipkart
Ranked among the most popular ecommerce companies in India, Flipkart offers a wide selection of product categories, ranging from fashion and electronics to furniture and gardening tools. The company, founded in 2007, competes with Amazon on customer experience, product variety, reward schemes, and price.
Flipkart also has a unique Plus SuperCoins reward scheme that lets consumers earn points on the purchases they make. The coins can then be traded for extra discount coupons, entertainment offers, and more.
Flipkart’s revenue is growing fast, with a reported 25% increase in 2021 compared to the previous year. The platform has more than 100 million customers who love its user-friendly interface and customer service.
8. Netflix
Where Amazon specializes in selling physical and digital products, Netflix focuses on a specific offering—video on demand. Founded in 1997 when entrepreneurs Reed Hastings and Marc Randolph mailed themselves a DVD (which arrived intact), Netflix provides its users with access to movies, TV shows, and documentaries.
Netflix has seen year-over-year growth, with the company bringing in a revenue of $25 billion in 2020. It’s biggest competitor is Amazon Prime Video, which is currently behind in terms of revenue of subscriber numbers.
Popular among Netflix’s 220 million+ subscribers is its original content, which the streaming giant releases at an average rate of over one original title a day.
How small businesses can compete with Amazon
Competing with a giant like Amazon can seem almost impossible for a small business. But there are ways to stand out from the big guys and gain customers who advocate for your brand.
1. Offer a memorable customer experience
Customer experience is the ultimate differentiator for any brand, and the main factor your audience will judge you by in today’s world.
According to a report by Segment, 71% of consumers feel frustrated when brands don’t personalize their shopping experience. However, 44% would likely make a repeat purchase after having a personalized experience with a retailer.
Upgrade your customer experience by:
- Writing handwritten thank you notes for customers
- Sending relevant personalized emails
- Offering incentives in exchange for feedback
- Solving customer complaints quickly
2. Prioritize omnichannel
Today’s consumers expect brands to be present on various platforms. Additionally, they want a consistent shopping experience across their channels. When acquiring new customers and retaining existing ones, offering an omnichannel experience is key to gaining an edge over your competitors.
According to a Shopify research study, 73% of shoppers use multiple channels before making a purchase. This means brands that sell across multiple channels (mobile, social media, online stores, and physical locations) stand out from the crowd.
Begin developing your omnichannel strategy by evaluating your target audience. Think about where your customers are most likely to want to buy something. Do they spend most of their time on social media when not shopping on marketplaces like Amazon? If so, Facebook and Instagram shopping options are ideal.
Not only will building an omnichannel environment impress your customers, but it gives you more opportunities to increase sales by reaching a larger audience.
Another way to compete with Amazon is to establish an active local community presence. Small businesses have an advantage here: they understand the needs of their community better than multinational corporations, meaning it’s easier for them to get involved and inspire consumers.
Some ways you can get involved:
- Participating in or sponsoring local events
- Arranging volunteering programs for your staff
- Donating to local causes
- Joining community boards relevant to your business
4. Promote on niche marketplaces
Marketplaces offer an opportunity to tap into an existing audience. However, Amazon isn’t the only marketplace worth considering. You can sell on other marketplaces that consumers are already familiar with and trust.
The ideal marketplace for you will depend on the kind of business you’re running. For instance:
- Etsy is great for selling items you make yourself
- eBay is ideal for selling collectibles and vintage items
- Chairish is perfect for selling furniture and home décor
Unique and personalized customer experiences are key to surviving the Amazon apocalypse
It’s clear that small businesses can’t compete with Amazon on price or shipping times. The retail behemoth has a massive logistics network and can source products at extremely low prices in huge quantities. New ecommerce brands may feel intimidated by Amazon at first, but the truth is, you can outpace Amazon by creating unique products and personalized shopping experiences that customers value.
Amazon competitors FAQ
What is Amazon Marketplace?
Amazon Marketplace is an ecommerce platform that allows retailers and brands of all sizes to list their products on the Amazon website. The way it’s set up allows sellers to take home a bigger portion of the profits from sales. You pay no listing fee and are allowed to sell both new and used products on the Marketplace.
Who are Amazon’s biggest competitors?
Amazon has competition in different sectors. Its biggest retail competitors are Alibaba, eBay, Walmart, JD, Flipkart, and Rakuten. For the online streaming services audience, Amazon competes with Netflix, Hulu, Apple TV, and Disney+. Amazon's main competitors in the cloud computing industry are Alibaba Cloud and Microsoft Azure.
Who are Amazon’s indirect competitors?
Indirect competitors are companies that operate a different business model but target a similar audience. Some examples include:
- Shopify
- Apple
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FAQs
Why Amazon How is it different from its competitors? ›
Competitive Advantage
The marketplace is excellent for customers due to its unique assortment of products. It is great for sellers because of the flexibility and popularity that the platform brings along with itself. More than 70,000 entrepreneurs with annual sales of more than $100,000 are on Amazon.
- Alibaba Group. Founded year – 1999. Headquarter – Hangzhou, China. ...
- JD.com. Founded year – 1998. ...
- Flipkart. Founded year – 2007. ...
- Ebay. Founded year – 1995. ...
- Walmart. Founded year – 1962. ...
- Target. Founded year – 1902. ...
- Costco. Founded year – 1976. ...
- Best Buy. Founded year – 1966.
Amazon business strategy can be described as cost leadership taken to the extreme. Range, price and convenience are placed at the core of Amazon competitive advantage.
Who is Amazon's main competitor? ›Amazon has competition in different sectors. Its biggest retail competitors are Alibaba, eBay, Walmart, JD, Flipkart, and Rakuten. For the online streaming services audience, Amazon competes with Netflix, Hulu, Apple TV, and Disney+.
Why does Amazon need to worry about competitors in online shopping? ›E-commerce companies like Company A need to worry about their competitors because of the universal availability of internet technology. Every company has the authority to use the internet for its organizational benefit.
Is Google a competitor of Amazon? ›Amazon and Google also compete directly when it comes to selling entertainment to consumers. Amazon offers paid and free streaming services for television, movies and music as part of Amazon Prime. Google runs Google Play, a pay-per-download and subscription service.
Who were Amazon early competitors? ›Overview. Amazon started off as an online bookstore selling books, primarily competing with local booksellers and Barnes & Noble.
What are the sources of Amazon competitive advantage? ›The Amazon Effect
Amazon is known for offering free shipping and convenience, but it also provides a vast selection of products at competitive prices. No hassle returns, an easy checkout experience, and a huge repository of reviews also help make Amazon a go-to option for a growing number of consumers.
The combination of sophisticated information technology, an extensive network of warehouses, multi-tier inventory management, and excellent transportation makes Amazon's supply chain the most efficient among all the major companies in the world. Those efficiencies have made the current shop-from-home world possible.
Which businesses will drive Amazon's future growth discuss at least three? ›But according to RBC Capital's Mark Mahaney, these are the three areas most likely to become Amazon's next growth drivers: shipping, business supplies, and groceries. Mahaney notes that he picked them based on market size, market efficiency, Amazon's competencies, and signs of traction by Amazon.
Is Shopify a competitor of Amazon? ›
While Shopify is a popular ecommerce platform, it is not a direct competitor of Amazon. Amazon is a marketplace that allows third-party sellers to list and sell their products on Amazon's website. Shopify, on the other hand, is an ecommerce platform that helps businesses create their own online stores.
What is Amazon's market share? ›...
Projected retail e-commerce GMV share of Amazon in the United States from 2016 to 2021.
With the ability to bid on products and the unique way for buyers and sellers to connect online, eBay is a top competitor to Amazon.
What separated Amazon from their competitors? ›Amazon offers its consumers greater ease of use over other retail e-commerce web-sites. It's superior search and query, recommendations based on past purchases, one-click ordering at check-out, multiple consumer reviews and ratings, and most recently dash buttons for automatic re-ordering are key differentiators.
Why does Amazon need to worry about competitors in online shopping? ›E-commerce companies like Company A need to worry about their competitors because of the universal availability of internet technology. Every company has the authority to use the internet for its organizational benefit.
What is the difference between Amazon and Amazon in? ›The main point is that they are different websites with different product ranges.. Amazon in ships only to destinations within India. Amazon com has most of its customers in the US but ships most of its items to almost all countries. Naturally shipping fees will be higher for customers outside the US.
What is one of the main differences in the business model between Amazon and Alibaba? ›Amazon is a massive retailer for both new and used goods, and Alibaba operates as a middleman between buyers and sellers.
How does Amazon gain competitive advantage? ›Amazon has been able to maintain sustainable competitive advantage based on three operational strategies. These are low cost-leadership, customer differentiation and focus strategies. Low cost-leadership is pursued by Amazon by differentiating itself primarily on the basis of price.
Who is Amazon's competition is it even possible to identity the industry in which Amazon Com operates? ›Alibaba / Aliexpress
This international giant specializes in wholesale selling online, which is a different business model from Amazon. It also differs from Amazon in another aspect — unlike Amazon being the umbrella brand for its different services, Alibaba operates separate businesses like Alibaba, Taobao, and Tmall.
Amazon's retail store rivals include Target, Walmart, Best Buy, and Costco. For subscription services, Amazon competes with Netflix, Apple, and Google. In the web services category, Amazon has several rivals such as Oracle, Microsoft, and IBM.
Why is Amazon a harmful monopoly? ›
Amazon's growing monopoly could wipe out retail jobs and stifle competitors. And, the fewer competitors there are, the more autonomy Amazon gets to control prices.
What are reasons that make Amazon so big? ›Finally, Bezos himself would argue that the main reason why Amazon is so successful is that they have a culture of innovation that allows employees to create without fear of failure.
Is Amazon a monopoly or oligopoly? ›Though Amazon may be dominant on its platform, with a steady stream of entrants into the market, it still allows competition to occur. Although its size is large, when analyzing Amazon's actions through the lens of the current definition of a monopoly from the Federal Trade Commission, Amazon is not a monopoly.
How many Amazon marketplaces are there? ›Amazon has 19 marketplaces worldwide, all of which allow third-party sellers to list and sell products. And through these marketplaces, Amazon offers over 350 million products.
Is Amazon a retailer or Marketplace? ›Amazon is a huge online retailer and cloud service provider, whereas, Amazon Marketplace is a third-party retail market that is integrated with Amazon. #2. Amazon is a customer service company providing a wide range of products from across the world to its customers.
Is Amazon a Marketplace or ecommerce? ›Amazon Marketplace is an e-commerce platform owned and operated by Amazon that enables third-party sellers to sell new or used products on a fixed-price online marketplace alongside Amazon's regular offerings.
Who is bigger Amazon or Alibaba? ›The "Amazon of China" is still a lot smaller than its American counterpart. Alibaba (BABA -1.76%) is often called the "Amazon (AMZN -4.83%) of China" because it's the country's largest e-commerce and cloud company. However, Alibaba is still a lot smaller than its American counterpart.
Which is better Amazon or Alibaba? ›BABA is the top e-commerce platform in China by profit, while Amazon is #1 in the U.S. by revenue as well as profit. Beyond the fact that they have similar core businesses, both Amazon and Alibaba also have cloud computing segments.
Who has more customers Amazon or Alibaba? ›Pay With Amazon, Amazon's new digital payment service has 33 million users. Alipay, Alibaba's payment platform is the world's largest mobile and online payment platform with 400 million users!