Here's Why Alibaba Is Becoming A Huge Threat To Amazon And EBay

Alibaba is expected to IPO in September and a new financial report from the company reveals that the Chinese e-commerce giant continues to grow at a blistering pace. The company’s growth pattern, and its recent entrance into the U.S. market, makes Alibaba a serious threat to e-commerce giants like Amazon and eBay.

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Alibaba is growing ~50% annually in volume terms.

The gross merchandise volume (GMV) — or, the value of all merchandise — sold on Alibaba’s e-commerce sites reached $US248 billion in 2013, 52% more than it sold in 2012.

GMV in the second quarter of 2014 was $US82 billion, which is 45% more than the same quarter last year.

Alibaba sells 4X as much stuff in dollar terms as eBay does, and it’s growing much faster.

It’s useful to compare Alibaba and eBay because they are both marketplace businesses — meaning they don’t actually own the merchandise they sell. Rather, retailers, merchants, and consumers use their sites to sell directly to consumers.

Alibaba owns two main e-commerce sites.

  • Tmall, an Alibaba site where retailers sell directly to consumers, grew 81% year-over-year in the second quarter.
  • Taobao, where consumers sell to other consumers, grew 33% year-over-year and still accounts for the majority of sales via Alibaba.


Mobile commerce is driving an increasing share of Alibaba’s business.

One in three dollars that flowed through Alibaba’s e-commerce sites came from mobile shoppers last quarter, up from 12% one year earlier.

For context, 30% of eBay’s GMV comes from mobile.

More than a quarter billion people bought something through Alibaba in the second quarter.

Alibaba’s customer base is already far larger than eBay’s, and it’s growing much faster.

Alibaba is still very dependent on Chinese shoppers.

Less than 1 in 10 revenue dollars from Alibaba’s e-commerce sites come from customers outside China. However, with the recent launch of its U.S. site 11Main.com, that could soon change. For comparison, almost 40% of Amazon’s revenues come from outside North America.

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

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