Amazon main competitors: who are they?

When it comes to online retail and eCommerce giants, there’s one brand that stands tall above all others — Amazon. With its unparalleled edge in logistics, transport, distribution and general technological innovation, Amazon is now so far beyond its competitors that it’s fair to ask if they really are competition. Just try to name an area of eCommerce where Amazon is not the gold standard. 

 

Go ahead, we’ll wait. 

 

However, despite its total dominance, Amazon still “only” sold about half of all goods bought online in the US last year. Yes, there are plenty of other online sites competing with Amazon for even a small piece of an enormous and growing eCommerce pie. Just as a reminder that there is life beyond Amazon, we’re going to take a look at some of the most noteworthy Amazon competitors online, trying to answer the questions of who they are and how they manage to survive and even thrive in an arena dominated by an online retail Godzilla. 

 

The Amazon business model

 

Before we dive in, let’s use broad outlines to quickly recap how the world’s largest online retailer managed to climb to the top of the mountain. If you’ve ever purchased from your local Amazon website, you already know that a significant portion of its product offer comes from third-party sellers. Of those, nearly 67% belong to a private label, while the rest trade in wholesale, retail, and online arbitrage, dropshipping, and handmade products. 

 

This business model allows Amazon to save a significant amount of money on production and storage. In a way, it acts as an intermediary between sellers and buyers, connecting them with each other, rather than a separate retail entity. Anyone looking for eCommerce success can learn a lot just by taking tips from the path that Amazon has taken. Amazon knows how to sell. 

 

Another crucial part of Amazon’s strategy is that it doesn’t limit itself to a specific product category. Instead, it has a reputation for being an eCommerce marketplace where you can find literally anything - from clothes to dietary supplements, from the latest books and movies to the rare antiques. What started as an online bookstore that slowly moved into CDs and DVDs now sells pretty everything from A to Z. Take a look at their logo for a reminder of this. 

Source: https://i.pinimg.com/474x/56/77/df/5677df05567aec377dd434d37095e136.jpg

 

Today, Amazon’s own business lines feature: 

 

  • Clothing - available through Amazon Fashion
  • Food - delivered across Amazon Fresh, Amazon Restaurants, and Amazon Meal Kits
  • Web services - including AWS, Amazon Drive (hello, Dropbox) and Amazon Dynamics 
  • On-demand services - featuring products from Amazon Home Services and Amazon Echo 
  • Entertainment - including Amazon Tickets, Amazon Game Studios, and Amazon Prime (which is a whole other story by itself) 

 

When you’re active in so many markets, how could you not bump into some serious competition?

 

Top Amazon competitors: who are they? 

 

Given that Amazon is at the top of the global eCommerce food chain and the variety of products and services offered by the platform, it is only natural it has many competitors across multiple niches and industries, all trying to chip away at their market share. Among the most high-profile ones we can outline: 

 

  • Global online marketplaces
  • Large physical stores and retailers
  • Social media marketplaces 
  • Subscription-based services
  • Niche eCommerce vendors

 

Before we go on and take a look at how exactly these brands compete with Amazon, it might be a good idea to learn which specific companies can be considered the main Amazon competitors.  

 

Online marketplaces

 

Online marketplaces are eCommerce platforms where the majority of the products and services they offer are provided by third parties, just as Amazon does it. However, they’re not the only brand with global recognition.

 

eBay

eBay has definitely secured its spot among the top eCommerce competitors to Jeff Bezos . While the platform is mainly used in the U.S. the brand is well-known across the globe as it is now available in more than 190 markets around the globe.

 

eBay started off as an auction-based website, however, over the years it managed to adjust its structure that many sellers used to find complex and expensive. Today, the vast majority of its sales are priced-as-marked purchases. 

 

The main advantage Amazon still holds over eBay, however, is the fact that the user can buy directly from the platform and sellers can use Amazon warehouses to store some of their products. 

 

Alibaba Group

The most obvious Amazon competitor would have to be AliExpress, a sub-brand of the global Alibaba Group. In 2020, Amazon’s revenue constituted $386 billion and Alibaba generated over $109 billion.  While Amazon dominates the American shopping space, Alibaba is a famous eCommerce giant reigning over China. 

 

Apart from the price range, there is a significant difference in how the two marketplaces approach business: while Amazon’s business model relies on commission-based revenue, Alibaba simply charges sellers for an opportunity to appear higher on its search rankings. 

 

It’s also worth remembering that there are a number of online retailers who, while they may not have Amazon’s global footprint, are very successful in their own home markets or regions. These include Rakuten in Japan (which is mostly B2B), Mercado Libre in South America, Allegro in Europe, Yandex in Russia and many others. 

 

Physical Stores and retailers

 

While Amazon is known for its online selling, it’s also been actively acquiring a community of offline stores. Also, given the post-pandemic shift towards online purchases, many people that would normally buy offline have now moved towards online shopping. As a result, many on-site retailers are now forced to compete with Amazon as well. 

 

Walmart

In 2020, Walmart became the world’s largest company by revenue, however it was quickly dethroned by Amazon in 2021. Right now, Walmart has more than 11.500 stores globally and operates both on the eCommerce and offline planes. 

 

The competition between Amazon and Walmart is growing fiercer by the year, mainly due to the fact that both stores are after the same customers in similar markets. The key difference, however, is the fact that Amazon largely relies on the distribution centers, while Walmart also needs to take care of the physical stores. Advantage Amazon. 

 

Best Buy

Best Buy is an offline store specializing in electronics. It’s large, international, and successful but, compared to Amazon, is much more of a physical presence in shopping districts. Amazon is definitely more eCommerce oriented. As a result, it’s not Amazon competing against Best Buy for the opportunity to sell the latest tech gadgets and house amenities, but vice versa. 

 

So far, Amazon stands out as a highly accessible worldwide online marketplace, while Best Buy sticks to the best practices of the previous century and prefers to grow offline. The question is how much longer will this model remain profitable for the electronics retailer and how soon will it grow more aggressive in its ongoing rivalry with Jeff Bezos. 

 

Social media marketplaces

 

Another important segment of Amazon’s competitors comes directly from social media. The key difference is the business model - none of the social media platforms is yet able to charge significantly for showcasing the sellers’ products. Instead, they gain revenue from advertising channels, user engagement, and brand promotion. 

 

Facebook

Image credit: Lifewire

 

Today’s Facebook is very different from the one you probably joined a decade ago, which is why while talking about all the ways in which the platform competes with Amazon, it’s essential to highlight two distinct areas: Facebook for business and Facebook Marketplace. 

 

Any brand or a single retailer is welcome to place their products and services on Facebook. Of course, there is a compliance policy they need to obey, but overall, it is much easier and cheaper to be present on Facebook than to fight for the slot on Amazon. 

 

Pinterest

Another social network often used by retailers to sell their products online is Pinterest. Of course, there is usually the matter of redirecting to the official store in order to complete the purchase (something that Amazon has very successfully avoided). However, given the entire nature of the platform, it seems to be a small price to pay. 

 

Pinterest has combined the best experiences from offline shopping and made it digital and accessible. More than 459 million monthly active users come to the platform to browse in search of inspiration which can be easily turned into a purchase. While Amazon lets shoppers buy the product they know they want, Pinterest allows them to discover what it is exactly they want exactly. 

 

Subscription services

 

Quite a significant chunk of Amazon’s revenue originates from Amazon Prime. It now comes as a bundle with Prime Video with the rest of the Prime services to make an outstanding value.

 

Netflix

Netflix is, by far, the most popular on-demand streaming service in the world. This is an interesting achievement given Amazon’s ces and ability to integrate its own platform, Amazon Prime Video, with other parts of its ecosystem. It’s hard to measure just how popular Amazon is in this field since the video service is bundled as part of its hugely popular Prime free shipping program, which is de facto a loyalty program since it rewards customers who make more purchases, more often.  

 

Netflix, however, appeals to the public with its unbeatable device compatibility and rapid addition of the latest titles to the library. While Amazon also has an impressive library, most of its content is older and less popular than the shiny blockbusters present on Netflix, to which the latter owes its success. 

 

HBO

Similarly to Netflix, HBO has a large library of popular movies and series and is even trying to maintain some of Disney titles before the inevitable rise of Disney+. It has established a profitable strategy of partnering up with local TV, internet, and even cellular service providers, thus generating more contract-based subscriptions. 

 

HBO still has fewer titles than Netflix, however, and doesn’t have much additional value to offer like Amazon. It’s biggest asset is its library of self-produced television classics that have dominated the medium over the last twenty-something years. 

 

Niche eCommerce vendors

 

Last but not least, when it comes to the main Amazon competitors, there are niche eCommerce vendors. It doesn’t make much sense to provide specific examples here, because there is an endless supply of them. It was estimated that there are between 12 million to 24 million eCommerce sites around the globe as of the end of 2020. Of course, not all of them have a chance against the global giants like Amazon or eBay, but they are growing nonetheless.

 

Thanks to dedicated eCommerce solutions like Shopify, any business can grow on its own without having to pay commission to the intermediary. And that in itself is a huge win for the SMB sector. 

 

How brands compete with Amazon

 

How does Amazon differentiate itself from competitors? By doing everything bigger and better than everyone else. 

 

So how do Amazon competitors survive? After an Amazon competitors analysis, it’s pretty simple: they try to give their customers something that Amazon can’t. Whether it’s a physical store, a different interface, or an affiliation with an up-and-coming Instagram celebrity. 

 

Amazon is impossible to beat head-to-head and that's why smart competitors don’t even try. Instead, they set up on ground where Amazon is not as strong or determined to take over. 

 

Looking at an overview of Amazon’s competitors, you can see that the main point is that there are plenty of ways to stay under Amazon's radar and still scale into a successful eCommerce. In fact, our advice would be to try and make it on your own before turning to Amazon for support. After all, we live during times when small businesses can finally enjoy their place under the online sun. 

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