AliExpress vs Amazon: Who's Winning the eCommerce Race?
AMZ Advisers, August 4, 2021
The ultimate ecommerce battle between AliExpress and Amazon has caused divided opinions among shoppers and sellers around the world.
It is evident that the pandemic accelerated online shopping like never before. Shoppers are looking for the best deals, and sellers are trying to find innovative ways to attract new customers.
And while both eCommerce giants are competing to expand their markets, each platform has its own business model and offers unique features.
In this article, we will analyze both platforms' pros and cons so you can decide which one fits your business’ needs.
AliExpress, Alibaba’s sister company, was launched in 2010. It was originally conceived as a marketplace that sold products from China only; however, they now recruit sellers from all over the world.
Alibaba, the wholesale platform that works as a parent company, has 80% of all online purchases in China. The company, directed by Jack Ma, had the biggest IPO when it took over the stock market back in 2014, according to the Harvard Business Review.
Alibaba Group, and consequently AliExpress, use avant-garde technology and analytics to help online sellers expand to new markets and to help brick-and-mortar stores go virtual.
However, there is something about AliExpress that makes it attractive, yet risky for many sellers…
Sellers on AliExpress
AliExpress is essentially the middleman between sellers and shoppers. And while the majority of merchants and manufacturers are based in China (which makes a huge difference in costs, in comparison to Amazon) it now allows sellers from other countries to advertise their products on the platform.
In short, their model focuses on selling products to consumers in different countries, directly from the importer’s warehouse.
Due to its role as an intermediary or middleman, the platform is not responsible for any issues related to customer service, and sellers have to deal with everything themselves.
Contrary to Amazon, where through its FBA program, sellers focus on improving their advertising strategy and their business operation only while Amazon takes care of all things related to customer service and the fulfillment of products.
Amazon was founded in 1994 by the American ecommerce pioneer, Jeff Bezos. In its early years, it started as an online bookstore, but quickly expanded to other markets by featuring different products.
Millions of sellers have consolidated their business on Amazon, and thousands of brands join the platform every day. Now, their product catalogue includes a huge range of categories, including Amazon’s own brands.
Amazon is known for its obsession to offer THE BEST customer service and they are constantly looking for ways to improve the user experience, investing in new technologies and tools to help sellers to boost their sales.
Its customer-centric approach has led the retail giant to span a wide variety of industries in the last decade. According to the NFR (National Retail Federation), as of 2021, Amazon is close to outperform Walmart in sales.
Sellers on Amazon
Unlike AliExpress, Amazon has its own suppliers, exclusive goods, warehouses, and fulfillment programs (FBA and FBM). It also features two selling plans: Amazon Vendor Central and Amazon Seller Central.
Amazon Vendor Central is an invite-only program where brands supply their inventory to Amazon, who in turn advertises and sells it. In this case, Amazon works as an online shop that purchases wholesale items and sells them at a higher price.
The Amazon Seller Central program is designed for sellers that want to keep control of their inventory. In this particular case, Amazon works as the middleman or platform provider, but with the advantage that it offers customer service support and high-class customer service through FBA (if the seller chooses to use this service).
AliExpress vs Amazon: Similarities
AliExpress and Amazon are not only platforms where customers can find all sorts of products, they also focus on making the shopping experience as smooth as possible.
Another thing they have in common is that they offer desktop versions and free mobile apps for iOS and Android. This makes it more accessible to users
Both are counteracting unethical selling and shopping practices, however Amazon invests more energy in this.
AliExpress vs Amazon: Differences
So now, let’s get to the good part. What makes these platforms different?
Amazon prices tend to be lower than in brick-and-mortar shops. Delivery times are a huge plus on Amazon. In some cases, you can even get your product in less than 24 hours. Customer service on Amazon tends to be a really helpful feature. Amazon manages vendor and FBA customer service. Amazon Prime, the subscription for users, promotes special prices and sales that lure in more buyers. The company invests in their hardware and software, making it more of a tech company than just a marketplace.
Amazon caters to so many categories and has so many products, that users may feel a little overwhelmed by the catalogue while for sellers it means their product can be hard to find. Amazon tends to have higher costs for sellers on their platform. Amazon sells its own brands and acts as a competitor for certain items/categories.
AliExpress has very low prices for products of any kind. The company has a website for each country, helping consumers to overcome the language barrier. AE has a guarantee for genuine products and a labeling system for reputation to ensure the quality of products. AliExpress offers Alipay, which has millions of active users.
One of the biggest disadvantages of AliExpress is shipment times. With most sellers being in China, shipping to other places in the world can take weeks or even months to arrive. So, you’ll have to think ahead. Returns also represent the same problems. Sending something back can take up a long time too. Customer service quality is lower.
AliExpress vs Amazon: Pricing
Extremely affordable prices are one of the main factors that have helped AliExpress become popular among buyers. The online store is also famous for their jaw-dropping discounts and their Chinese New Year Sales Spree, which takes place at the end of January.
Coupons are also a great hit on AliExpress. Usually, these are offered by sellers that are trying to encourage regular visitors to remain loyal and newcomers to buy their products.
However, shoppers who favor Amazon over AliExpress, are normally willing to pay higher prices simply because they want to avoid long shipping times.
As we mentioned before, Amazon focuses its efforts on programs whose main focus is to retain and please customers. The marketplace is interested in creating a connection with shoppers, not only as a platform for third-party sellers, but also as a brand itself.
That's one reason why Amazon offers its Prime membership. A subscription that grants shoppers a wide variety of perks such as FREE Same-day, -One-Day, or -Two-Day Delivery, as well as shopping and streaming benefits.
AliExpress vs Amazon: Which One Is the Best Platform for Sellers?
Amazon’s FBA program allows sellers to send products in bulk to their warehouses as inventory. Then, once a sale is made, Amazon will manage logistics and delivery. This opens a window of opportunity that lets you work with both platforms.
The key for entrepreneurs to succeed with this business model is finding a supplier with great prices that sells the product you’re looking for…like AliExpress.
AliExpress’ affordable prices can allow you to still have a very decent margin when sourcing your products from them and using Amazon FBA.
However, this means you’ll need a supply plan that considers the long shipping times to make sure you don’t end up making sales on Amazon while waiting for the products from AliExpress.
You can actually just get a couple of items from AliExpress to check if they’re actually what you want and take the opportunity to get in touch with the seller directly.
So, as you can tell, the AliExpress vs Amazon debate does not come down to exactly who has the cheaper prices.
Who’s winning the battle? It’s hard to tell. AliExpress has a strong presence in the eastern side of the world and Amazon in the west, so users of each side are accustomed to different operations. However, this does not mean that it will be this way forever.
As both ecommerce platforms try to expand their share in the European market, we can expect more benefits from both in the near future.
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