How Amazon.com, Inc. (AMZN) Plans To Take On Alibaba Group Holding Ltd (BABA)?

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Amazon.com, Inc. (NASDAQ:AMZN) and Alibaba Group Holding Ltd (NYSE:BABA) are both engaged in the online retail space. The Chinese firm is fast catching up with its American counterpart. Therefore, how the American firm is taking on the Chinese e-commerce will haunt any investors. However, the company appears to be fully geared and has a clear-cut roadmap to take on the Chinese e-com firm and stay ahead of it. One of them is having a presence in shipping and logistics as that would not only fulfill its own requirements but would also take care of the third-party shipments.

Aggressive Global Expansion Of Fulfillment Centers

Amazon.com, Inc. (NASDAQ:AMZN) seems to have prepared a report way back in 2013 that allowed an aggressive expansion of its fulfillment centers globally for its Amazon Service. The objective was to offer storage, packaging, as well as, shipping for independent merchants, who have displayed their products on its site for sale. The report suggested an international delivery network could control the goods flow from its factories in Asia like China, as well as, India to customer places in London, New York and Atlanta. The online retailer named the project as Dragon Boat, which was proceeding as planned.

The online market place firm drew its tactics in 2013 itself. Accordingly, the company was expecting in case the number of merchandise from its sellers in one country to a buyer in some other country. It was termed as a ‘revolutionary system’, which would mechanize the complete supply chain at a global level while removing most of the legacy waste connected with the handling, as well as, freight booking. The company would have to depend on merchants’ networks in manufacturing countries such as China and strengthen their inventory in shipping points. The biggest online retailer was also ready with a plan to handle a large volume of goods by acquiring more space for cargo at cheaper wholesale rates.

Pass On The Savings To Small Merchants

Amazon.com, Inc. (NASDAQ:AMZN)’s idea was to win over the small merchants and, therefore, was ready to pass whatever saving it could get from the cargo rent. The company was also confident that through the shipping and automated paperwork, it could slash the expenses and make the procedure further convenient for merchants. The online retailer was very well aware that merchants from India and China were always interested in reaching online shoppers in the America and Europe. Therefore, it selected to close the rank between them. Their proposal envisioned that the new logistics business would be open to cross-border commerce to small merchants too. As a result, the company would be in a position to attract more products available throughout the world to its customers.

Amazon.com, Inc. (NASDAQ:AMZN)’s tactics meant that not only FedEx Corporation (NYSE:FDX) would become its rivals but also Alibaba Group Holding Ltd (NYSE:BABA). That was because both are trying to dominate the fast-growing cross-border e-commerce market. Therefore, the biggest online retailer believes that the fulfillment centers and logistics would make its cross-border e-commerce a better bet.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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