Founded in 1994, Amazon became the second-fastest industry to reach a trillion-dollar valuation in 2018. It is a tech giant that has been making waves in all sectors, from cloud computing to eCommerce to digital streaming, and “everything.”
The company breaks down its revenue into five key categories – AWS (Amazon Web Services), third-party seller services, physical stores, online stores, and subscription services.
Also, the company’s total consolidated net sales revenue was $496.8 billion in 2021. That’s because it has a far broader range of businesses.
Did you know that Amazon, the eCommerce juggernaut stole the title of the world’s largest retailer from Walmart? Yes, the company grabbed the position of 28th number just before the Walmart on Forbes Global 2000 list of the world’s largest public corporations as evaluated by a score of assets, market value, profits, and revenues.
Strictly put, Amazon doesn’t appear to be slowing down anytime soon as it controls 45% of the eCommerce market share in the US alone.
Today the company’s business line features:
- Entertainment includes Amazon Game Studio, Amazon Prime, and Amazon Tickets.
- On-demand Services that offer products from Amazon Echo and Amazon Home Services.
- Food that is delivered across Amazon Meal Kits, Amazon Fresh, and Amazon Restaurants.
- Web Services, including Amazon Dynamics, Amazon Web Services, and Amazon Drive (Dropbox & Hello).
- Clothing
Nonetheless, despite the company’s dominance in the industry, Amazon faces stiff competition from its top competitors, including Alibaba, eBay, Home Depot, etc.
Let’s have a look at some of its top alternatives and how they are thriving in the industry and giving tough competition to Amazon.
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Top 13 Alternatives & Competitors to Amazon
Albeit Amazon is turning out to be one of the top globally recognized brands, it is only logical that it has many competitors from various industries and niches battling for market share. Here’s a list of a few sectors where Amazon is facing competition:
- eCommerce Sector
- Offline Sector
- Web Services
- AI (Artificial Intelligence)
- Digital Services.
- Grocery.
Let’s take a look at brands/companies in each sector and how they are competing with Amazon:
Amazon Competitors in the eCommerce Sector
Amazon is one of the biggest eCommerce platforms welcoming over 2.7 billion visits as of June 2021. Also, in the eCommerce sector, Amazon has always faced fierce competition particularly, China has proven to be a challenging market for Amazon to penetrate.
That’s because it has the world’s biggest eCommerce economy, and its domestic behemoths have proven to be formidable rivals to Amazon on a global scale.
Here’s a list of some of the top competitors to Amazon in the eCommerce sector:
Alibaba
- Founded: 1999.
- Headquarters: Zhejiang, China.
Alibaba Group is an eCommerce company that operates in over 200 countries via Tmall, Taobao, Alibaba, and AliExpress.
With over 250,000 employees, Alibaba generated a revenue of $31.8 billion in the third quarter of 2021.
It started as a B2B market and emerged as the B2C market, with AliExpress that offers dropshipping services.
Albeit Alibaba doesn’t come close to Amazon, especially when we look at the revenue figures, Alibaba generated a revenue of almost $109.4 billion in 2021, whereas; Amazon welcomed a revenue of $386 billion as of 2020.
Amazon holds a dominant place in the global market, but it cannot beat Alibaba in the Chinese economy. That’s because, in mid-2018, Alibaba accounted for 58.2% of eCommerce sales in China, while Amazon, with only 0.7% of eCommerce sales, surely has a long way to go.
eBay
- Founded: 1995.
- Headquarters: California.
Albeit eBay and Amazon sell different products and caters to the need of different audiences, eBay is considered to be the top competitor to Amazon in the eCommerce niche.
eBay is the pioneer in C2C selling and has enough reputation and experience to lure Amazon buyers and sellers.
With over 1.5 billion live listings, eBay is now available globally in more than 190 markets.
In 2021, eBay’s global GMV (gross merchandise value) rose to $87.5 billion, and active buyers increased to almost 182 million.
As of October 2021, eBay accounted for 4.2% of eCommerce sales while Amazon held a market share of 41% in the US.
eBay is a platform that is used to buy and sell new and used products, making it a popular marketplace for second-hand merchandise.
Jingdong (JD)
- Founded: 1998.
- Headquarters: Beijing, China.
It is a Chinese eCommerce platform and is probably one of the potential competitors to Amazon, particularly in the B2C market.
The company’s revenue soared to $32 billion as of the first quarter of 2021 and became China’s biggest retail corporation on Fortune 500 (in terms of revenue).
JD, like Amazon, has its own delivery network and logistics and has also expanded in other sectors, including healthcare.
Although Jingdong is much smaller than Amazon, it has developed a high-tech delivery network combining AI-powered sophisticated drones and robots.
Rakuten
- Founded: 1997.
- Headquarters: Tokyo, Japan.
It is a Japan-based eCommerce site that offers almost everything, including investment incubation, online shopping, streaming services, etc.
Also, the company is known as the Amazon of Japan as it has grown globally and accounts for around 14% of global eCommerce retail sales.
What’s more, the company operates on a different business model to fuel its growth, using a cash-back model to entice buyers to shop products from Rakuten instead of buying directly via brands.
This strategy helped Rakuten welcome a revenue of $13.69 billion as of 2021. Also, the company acquired Ebates for $1 billion to establish its presence in the US market, making it a top competitor to Amazon.
Amazon Competitors in Offline Sector
Amazon’s target market isn’t solely reliant on online purchasing, many people prefer going out and buying from physical stores, even if the products are available online on Amazon.
However, these traditional physical stores have now started operating online and chipping into Amazon’s market share:
Home Depot
- Founded: 1978.
- Headquarters: Atlanta, Georgia.
It is one of the largest home improvement retailers operating in the US, which offers products at reasonable prices.
As of 2021, Home Depot sales surged and generated a revenue of almost $151.2 billion, an increase of 14.4% from 2020.
Also, the company, with over 500,000 employees, is positioned at number 18th on Fortune 500.
In the home improvement category, both the companies (Amazon and Home Depot) go head to head. Plus, the latter has been combatting Amazon by offering a better shopping experience and faster deliveries.
This, in turn, makes Home Depot one of the potential competitors to Amazon in the category of home improvement products.
Walmart
- Founded: 1962.
- Headquarters: Bentonville, Arkansas.
With over 11,500 stores globally, Walmart is an American-based multination retail company. The company operates a chain of grocery stores, hypermarkets, and supermarkets, making it one of the top competitors to Amazon.
In 2021, Walmart accounted for a market share of almost 6.6% within the US eCommerce retail market and demonstrated growth year after year. What’s more, in the home furnishing category, Walmart holds a market share of 10.1%, whereas Amazon has a share of 10.5%.
Plus, Walmart surpassed Amazon in the food and beverage market with a market share of almost 19% vs. 1.9% of that of Amazon.
Amazon Competitors in Web Services
Amazon web services have been dominating the clouding industry for a long time. However, solutions from tech giants such as Google and Microsoft have stolen the dominance from Amazon.
Google Cloud Platform
- Founded: 2008.
- Headquarters: Mountain View, California.
Google is a tech giant that specializes in internet-based solutions and services. As of the third quarter of 2021, GCP (Google cloud platform) globally had a market share of almost 8%.
The company’s product GCP has been showing a steady growth year over year and is possibly a great alternative to AWS (Amazon Web Services).
AWS is more established than GCP, with a robust global network capable of supporting some of the most complex IT environments in the world.
Also, AWS provides more than 140 distinct services to consumers in the areas of IoT (internet of things), networking, mobile, computing, etc. Google Cloud Platform offers far fewer services and is less versatile than AWS.
What’s more, GCP is more prominent for PaaS (platform-as-a-service) and IaaS (infrastructure-as-a-service) use cases than for enterprise solutions. The company intends to counter this by increasing the investment in enhancing enterprise processes and forming new alliances.
Nonetheless, Google Cloud Platform integration with tech behemoth “Google” indeed gives it an edge.
Microsoft Azure
- Founded: 2010.
- Headquarters: Redmond, Washington.
Microsoft Azure – the clouding solution offered by the tech company Microsoft held a cloud market share of almost 21%. This, in turn, makes MA (Microsoft Azure) the world’s second-largest cloud infrastructure provider.
Plus, the Azure active directory is used by over 5 million businesses across the globe. Also, 4 million developers prefer using Azure’s visual studio team services.
Although both AWS and Microsoft Azure offers similar services, Microsoft’s huge ecosystem and better experience give it a competitive edge over AWS.
Amazon Competitors in AI (Artificial Intelligence)
Alexa is a VA (virtual assistant) developed by Amazon that uses machine learning and artificial intelligence to replicate human-like interactions via spoken language. Alexa faces direct competition from Apple and Google.
Apple Siri
- Founded: 2010.
- Headquarters: Cupertino, California.
Although the virtual assistant is exclusively available within Apple devices, Siri by Apple is immensely popular. For a VA tied within a single ecosystem, Siri has held the top spot for a long time, and that’s because:
- The popularity of Apple iPhones, which include Siri as a part of their software interface.
- It was one of the first commercially available artificial intelligence VA.
- According to voice serach statsitics around 500 million people are using Siri services.
Apple’s Siri holds a market share of 45% among smartphones VA as of November 2020.
Google Assistant
- Founded: 2016.
- Headquarters: Mountain View, California.
Google assistant is one of the best virtual assistants existing in the market, with a share of almost 36%. It works with Android smartphones and allows you to automate tasks, including setting alarms, etc.
Both VA’s Alexa and Google Assistant have similar features, yet they differ in specific aspects. Nonetheless, Alexa is a far better choice than Google assistant, especially when it comes to general knowledge tests.
Amazon Competitors in Digital Services
Amazon features a diverse range of products. The eCommerce platform also offers digital services, including Amazon Prime Music, Amazon Prime Video, as well as a production studio, Amazon Studios.
Spotify
- Founded: 2006.
- Headquarters: Stockholm, Sweden.
It is an online music streaming service that offers users access to millions of playlists, songs, and albums.
As of the second quarter of 2021, Spotify was the second-largest music streaming service with a market share of almost 31% and almost 406 million monthly active users.
What’s more, Spotify has a complete edge over Amazon Prime Music as it offers both free and paid options.
Netflix
- Founded: 1997.
- Headquarters: Los Gatos, California.
Netflix is one of the top rivals of Amazon. With over 222 million subscribers, Netflix holds a top rank in digital distribution services in the US as well as globally.
Also, with the company’s original production under the same banner and various TV series and shows, Netflix has ruled supreme in the digital distributing service market.
Although both the streaming services follow the subscription-based model, Netflix has a competitive edge over Amazon Prime Service.
Amazon Competitor in Grocery
In 2017, Amazon began its entry into departmental and grocery stores by acquiring Whole Food Market.
In-store sales were gradual in the initial years, and it still has to go a long way to reach the level of physical retailers.
Kroger
- Founded: 1883.
- Headquarters: Cincinnati, Ohio.
With 2800 stores, Kroger is one of the largest supermarket chains in the US, spread across 35 different states.
Albeit Walmart is in direct competition with Amazon, especially when it comes to online shopping, Kroger has shown impressive year-over-year growth and ranks at the third position, right below Walmart.
In terms of grocery sales, Kroger was ranked third with almost $1.5 billion as of 2018, which has no comparison with Amazon’s $8 billion sales. However, in 2018, Kroger experienced a surge of almost 64% in sales and has been showing steady growth since then, making it a top threat to Amazon.
The Takeaway
It is safe to say that Amazon has brought a revolutionary impact; it has changed the way people shop! Also, Amazon is impossible to compete in a head-to-head matchup, which is why clever competitors don’t even bother trying.
In fact, smart competitors prefer setting grounds in areas where Amazon lacks and is keen to seize control.
