Debate Over “Why Amazon Should Fear Alibaba”

My latest article on Forbes Why Amazon Should Fear Alibaba has generated some debate. The premise of the article is that Alibaba is more focused on helping small businesses because its success depends critically on its sellers’ successes. Amazon is less so because it is a giant retailer itself, and small businesses account for only 40 % of its sales (versus 100 % on Alibaba’s Tmall). The article points out some practices by Amazon that hurt small businesses.

One person posted the following comment:

As a retired small business owner, I really like the model that she presents as Alibaba’s “ecosystem”. I think she is right, once this service comes to America, small businesses will flock to it. Small business in America is tired of being bullied by massive corporations that have consumed modern marketing and hold them hostage. The $25,000 up front deposit is nothing if Alibaba can deliver on and keeps its promises. Amazon on the other hand is dangerous to work with and rather than becoming a marketing partner, becomes a predatory competitor.

Another reader obviously didn’t agree, and commented:

Alibaba’s heralded stab at the U.S. market, 11 Main St., was rubber knife, sold off less than a year later with other U.S. assets acquired pre-IPO. Tmall is a huge ecosystem of brutal competition where the top stores that spend big on marketing reap big rewards, and the bottom 60% suck wind… Better yet, try to get ahold of a forthcoming, transparent, English-speaking service rep at Alibaba to answer your questions. Tmall is a great channel, but no silver bullet for small western businesses, by any means.

I welcome this kind of debate. The sparks of truth come forth only after the clash of different ideas. Amazon is a very innovative company although it may have fallen short in serving small businesses. Alibaba, on the other hand, has a lot of work to do in order to win over Western small businesses.

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