Asian E-commerce giants Alibaba and Rakuten: a comprehension of their key operational parameters
The e-commerce came into existence in the year 1994 and has ever since grown to the present USD 1800 billion industry globally. The growth came on the back of increasing internet users’ base and increasing consumer preference for purchasing goods online, owing to the ease of shopping. The e-commerce industry in Asia accounts for 52% of the global e-commerce industry and has mirrored the overall growth in the global e-commerce over the same period.
The healthy growth of the Asian e-commerce industry has led to many new entrants competing for a bigger market share. Alibaba of China, the world’s biggest e-commerce company and Rakuten of Japan dominate the Asian e-commerce market. Alibaba and Rakuten both are an online marketplace operators, these companies do not own or sell the products under the …show more content…
Additionally, Rakuten’s marketplace model is slightly distinct from Alibaba’s since Rakuten derives its revenue from deposits, annual user fees and sale commissions charged from retailers who use their platform. Alibaba’s site Tmall, has a similar business model as Rakuten. In addition to this, Alibaba’s largest website Taobao operates as a marketplace which does not charge fees for completing transactions. Alibaba generates advertising revenue from active sellers who pay to rank high on the company’s internal search engine. Thus, due to different business models, Alibaba continued to have lower revenue as a percentage of GMV compared to Rakuten in the four-year period. Rakuten’s revenue as a percentage of GMV declined in the time frame as a result of discounts and rebates offered to buyers and sellers to increase business in face of intense competition, whereas the same decreased marginally for Alibaba as a consequence of its Tmall site which had the identical business model of
The e-commerce came into existence in the year 1994 and has ever since grown to the present USD 1800 billion industry globally. The growth came on the back of increasing internet users’ base and increasing consumer preference for purchasing goods online, owing to the ease of shopping. The e-commerce industry in Asia accounts for 52% of the global e-commerce industry and has mirrored the overall growth in the global e-commerce over the same period.
The healthy growth of the Asian e-commerce industry has led to many new entrants competing for a bigger market share. Alibaba of China, the world’s biggest e-commerce company and Rakuten of Japan dominate the Asian e-commerce market. Alibaba and Rakuten both are an online marketplace operators, these companies do not own or sell the products under the …show more content…
Additionally, Rakuten’s marketplace model is slightly distinct from Alibaba’s since Rakuten derives its revenue from deposits, annual user fees and sale commissions charged from retailers who use their platform. Alibaba’s site Tmall, has a similar business model as Rakuten. In addition to this, Alibaba’s largest website Taobao operates as a marketplace which does not charge fees for completing transactions. Alibaba generates advertising revenue from active sellers who pay to rank high on the company’s internal search engine. Thus, due to different business models, Alibaba continued to have lower revenue as a percentage of GMV compared to Rakuten in the four-year period. Rakuten’s revenue as a percentage of GMV declined in the time frame as a result of discounts and rebates offered to buyers and sellers to increase business in face of intense competition, whereas the same decreased marginally for Alibaba as a consequence of its Tmall site which had the identical business model of