If you think about online retail right now, you probably will have Amazon at the top of the list, as well as Google and eBay. Yet, there is a newcomer that is currently local to China with plans to expand. With a lot of momentum, Alibaba is becoming well-known very fast. Even to the extent of being compared to the likes of Amazon. There is even now discussion of the e-retailer teaming up with Amazon to gain more online market.
Alibaba is a China-based online retailer, similar to Amazon, that has expressed it is open to a joint venture with Amazon. CNN Money reported last week how Alibaba's co-founder and CEO Jack Ma in an interview with Bloomberg News on the floor of the New York Stock Exchange, stated that he would welcome partnering with the American online giant. He stated, "I would be interested in talking because as always, anything, anybody that involves helping small business we will feel excited". It appears Alibaba is optimistic about it's current stance in the world of e-commerce and to team up with Amazon will do volumes for expanding, especially in the US.
Alibaba could gain much from Amazon's established footprint in the US. Amazon has a number of distribution centers strategically in major US cities, which Alibaba could gain from. This is one of the differences the two online retailers have. Alibaba doesn't have robust fulfillment centers and does not own most of its' sold items. Also, Amazon has 132,000 employees to support its' efficient operation, compared to Alibaba much smaller employee base. However, at a certain point, a joint venture between the two would end, if they begin seeking after the same customers. Ma wrote in a letter to employees this year, "Lying behind the massive allure of the capital market, there is unparalleled ruthlessness and pressure. In this market, only a small number of outstanding enterprises can maintain a gallop."
What type of partnership Alibaba and Amazon could create, only time will tell. Yet, once the time comes to ultimately get the online products to their shoppers' front door, it probably would involve same-day delivery. Amazon has impacted the physical store and web-based retailers with its' aggressive implementation of same-day delivery, which gets customers their products fast. It's distribution centers have been built to support the service and now Amazon has been rolling out same-day delivery in multiple cities. This includes a launch in early August in New York City, Indianapolis, Baltimore, Washington DC, Philadelphia, and Dallas. Also, Amazon's most recent announcement offering same-day delivery in Atlanta and a number of surrounding metro cities.
Physical store retailers are definitely gleaning from Amazon and implementing same-day delivery as well. Barnes & Noble is partnering with Google to offer same-day delivery of its' books in several cities. Google Shopping Express affords brick-and-mortar retailers a partner to offer their store products to be delivered the same day also. Brand department store leader Macy's has also recently announced partnering with Deliv and join the race for same-day delivery. It will begin this fall offering it in Chicago, San Jose, Houston, Los Angeles, San Francisco, Seattle, D.C. and New Jersey. Bloomingdale's will be doing the same in some of those cities also.
Amazon has stated it will utilize its' own fleet to perform its' deliveries, however, other retailers don't have to. A number of retailers are partnering with a same-day courier like A-1 Express to perform the deliveries for them. The Seattle courier has a national footprint and can quickly implement a same-day logistics solution. A-1 Express can be a one-stop source for same-day delivery, store returns and even shoppers can utilize the courier as well relative to their online purchases. For Amazon and Alibaba, even mentioning a partnership shows that other companies should become even more innovative to increase their online growth, or it may get hard trying to swim upstream in a dominated market.
Reference: 9.19.14, CNN Money, Jesse Solomon, An Amazon-Alibaba deal? It's possible