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By Trefis Team

Alibaba is often referred to as the ‘Amazon of China’ because of its growth trajectory being nearly identical to that of Amazon. Both companies started off as e-commerce platforms, but over the years evolved into much more diversified companies with a significant focus on technology. But are their business models really similar to each other?

Trefis attempts to answer this question by comparing the various revenue streams for Alibaba vs Amazon in an interactive dashboard. While Amazon is the larger of the two companies by a significant margin, both companies have quite similar revenue streams.

  • When comparing Commerce as well as Cloud revenues, Amazon’s revenues are nearly 15x that of Alibaba’s.
  • However, Alibaba’s advertising revenues are quite comparable to that of Amazon’s.
  • The gap between Subscription Revenues for both companies is likely to continue expanding on the back of Amazon’s wider and more local focused reach.
  • Despite the law of large numbers being against Amazon, the U.S. company’s reach is likely to remain an order of magnitude higher than that for the Chinese giant.
  • That said, a side-by-side comparison of the two companies shows that Alibaba’s title of ‘Amazon of China’ really does fit.
Today In: Money

You can see more Trefis technology company data here.

A Detailed Comparison Of Historical & Expected Trends In Revenues For Both Companies

Total Revenues

Amazon revenues:

  • 2016 revenue $136 bn; 2018 revenue $232.9 bn; 2016-18 growth of 71.3%.
  • 2020E revenue of $350.2 bn; 2018-20E growth of 50.4%.

Alibaba revenues:

  • 2016 revenue $9.4 bn; 2018 revenue $23.2 bn; 2016-18 growth of 146.1%.
  • 2020E revenue of $41.7 bn; 2018-20E growth of 79.9%.

Ratio of Amazon’s to Alibaba’s total revenues had reached from 14.5x in 2016 to 10.1x in 2018. Considering 2018-20E growth of 50.4% in Amazon’s total revenues versus expectations of 79.9% for Alibaba’s total revenues, we expect the ratio of revenues to narrow further to 8.4x by 2020.

Below, we summarize key trends from our detailed interactive dashboard comparing revenue streams for Alibaba vs Amazon

Commerce revenue

Ratio of Amazon’s to Alibaba’s commerce revenues have fallen from 33.6x in 2016 to 17.3x in 2018. Considering 2018-20E growth of 39.8% in Amazon’s commerce revenues versus expectations of 97.2% for Alibaba’scommerce revenues, we expect the ratio of revenues to shrink further to 12.2x by 2020.

Cloud revenue

Ratio of Amazon’s to Alibaba’s cloud revenues had reached from 32.6x in 2016 to 17.5x in 2018. Considering 2018-20E growth of 75.5% in Amazon’s cloud revenues versus expectations of 145.8% for Alibaba’s cloud revenues, we expect the ratio of revenues to reach 12.5x.

Advertising revenue

Notably, Alibaba’s advertising revenues have been larger than Amazon’s over 2016-17. But the ratio of Amazon’s to Alibaba’s advertising revenues flipped from 0.6x in 2016 to 1.1x in 2018. Given Amazon’s push into advertising over recent years, we expect the ratio of revenues to reach 1.7x by 2020 in Amazon’s favor.

Subscription revenue

Ratio of Amazon’s to Alibaba’s subscription revenues had reached from 6.6x in 2016 to 7.7x in 2018. Considering 2018-20E growth of 80.3% in Amazon’s subscription revenues (driven by the geographical expansion in Amazon Prime video offerings) versus expectations of 60.4% for Alibaba’s subscription revenues, we expect the ratio of revenues to reach 8.7x.

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs

Feature Image Credit: The Alibaba Group Holdings Ltd. logo is displayed outside the company’s offices in Beijing, China

By Trefis Team

Led by MIT engineers and Wall Street analysts, Trefis (through its dashboards platform dashboards.trefis.com) helps you understand how a company’s products, that you touch, read, or hear about everyday, impact its stock price. Surprisingly, the founders of Trefis discovered that along with most other people they just did not understand even the seemingly familiar companies around them: Apple, Google, Coca Cola, Walmart, GE, Ford, Gap, and others. This might include you though you may have invested money in these companies, or may have been working with one of them for years as an employee, or have consulted with them as an expert for a long time. You can play with assumptions, or try scenarios, as-well-as ask questions to other users and experts. The platform uses extensive data to show in a single snapshot what drives the value of a company’s business. Trefis is currently used by hundreds of thousands of investors, company employees, and business professionals.

Sourced from Forbes

By Nicole Buckler

Singles Day, held in China, is a day where Chinese shoppers go mental, buying themselves all sorts of nice stuff. This is all in aid of cheering themselves up while living the single life. The day is now the biggest day for e-commerce sales in the world.

The celebration for Singles Day held on 11/11 used to celebrate people who were proud to be single. So about those 1s in the date – obviously, single means “1.” But also, the four 1s evoke “bare branches,” the Chinese expression for the unattached. So the day became an anti-Valentine’s day of sorts. It was a self-love day. It was nice. Ahh.

But since the day started out, a lot has happened. There are now lots of single dudes in China. And, they are slowly getting richer. They have Yuan to burn and no one to spend it on but themselves. But let’s not forget the Chinese women too. They are now richer, taking their time to marry, and certainly love a good spend-up. And, if these women can afford it, it is the day where luxury brands get a solid burst of credit card love.

Even up until the Noughties, Singles Day used to be a small celebration. Then Billionaire Jack Ma of Alibaba came along (Alibaba is the Amazon.com of China.) Ma decided that he would do huge promotions around the day and plug it as an online shopping fiesta. And it worked. It is now the biggest online sales event in the world.

People who have gone on to marry have kept buying themselves stuff on Singles Day, jealous of singles and their self-spoiling. Singles Day is now a 24-hour-period where just about every demographic goes utterly mental with their credit cards. And if we don’t adopt it in Europe I was be very distressed. It sounds awesome.

While Alibaba was the first to link Singles’ Day to a shopping craze, plenty of rivals have joined in. Xiu.com is a Chinese luxury e-commerce platform. It just released its sales report for this year’s Singles Day.

So much to buy, so little time…

Here are the sales stats generated via Xiu.com:

Online shoppers born after 1990 have become the leading consumer group in China

Online shoppers aged between 25 and 30 (born between 1987 and 1992) took up the biggest share of Xiu.com’s total sales on this year’s November 11. Purchasing behaviours vary significantly across age groups. Citing a few examples: the favourite fashion brand among women shoppers born in the 2000s was The Kooples, an emerging French street fashion brand featuring a Brit-pop style that, to date, had not yet proven popular in China.

Shoppers born in the 1990s preferred Dolce & Gabbana. Burberry was the top-selling fashion brand among women born in the 1970s and 1980s.

Giuseppe Zanotti was the best-selling shoe brand among male shoppers born in the 1990s and 2000s, while men born in the 1980s preferred Gucci. Men born in the 1960s and 1970s opted overwhelmingly for Prada. Surprisingly, Chanel was the favoured brand among male shoppers born in the 1950s.

Burberry remains the country’s favourite brand

The top selling brands overall were Burberry, Gucci, Louis Vuitton, Prada, Dolce & Gabbana and Chanel.

However, obvious differences existed between different cities. In Beijing, Moncler was the bestselling brand, while in Shanghai, Hermes, which was barely mentioned in other cities, proved to be the best seller. Philipp Plein was favored by Shenzhen buyers, while Emporio Armani sold best in Chongqing.

Male buyers spend more in fashion field

This year saw a huge increase in the average sale among men for fashion items, outspending the women. Male shoppers preferred the casual style of Armani Jeans and the avant-garde fashion style of Philipp Plein, while women remained with traditional luxury brands represented by Valentino, Dior and Chanel.

Beijing is where most of the shoppers are

Beijing ranked first on Xiu.com’s list of the top 20 Chinese cities in terms of sales during the one-day event, followed by Shanghai, Shenzhen and Chengdu.

The overall results showed that while there were more luxury-item shoppers in the bigger cities, people from smaller towns spent more per person, although there were fewer of them. So this seems to show that there is more money in bigger cities, which seems to be true of every country in the world.

If we can learn anything from this, it is that European luxury brands are killing it in China. And, that we must institute Singles Day here at once, people. Let’s get on it!