Amazon Competitors Analysis [2021]: How Do They Diversify?

Have you ever wanted to perform an Amazon Competitors Analysis?

Amazon has the highest revenue of any eCommerce corporation in the US, and so it’s no surprise that its fiercest rivals are some of the largest corporations in the world. Amazon’s insane growth is even more impressive, considering the online marketplace originally started out selling books.

Amazon was launched by Jeff Bezos, who operated for a long time as both president and CEO. In fact, Bezos only recently stepped down as CEO. Bezos founded the eCommerce giant in 1994 out of his garage in Seattle, Washington. His age? A mere 30 years old.

Fast forward 27 years, Amazon is now worth over $230 billion and is reported as being the largest retailer in the world, ahead of the likes of Walmart. That’s genuinely phenomenal growth, irrespective of how you feel about Bezos. Check out our guide on Amazon’s SWOT analysis here.

Essentially, Amazon is the entity you’re competing with when selling online.

The company’s market share is valued at around 50% as of 2021. For perspective, eBay is the next closest corporation with a 20% market equity, which highlights Amazon’s dominance.

Amazon has a lot of competitors, having diversified its offering to cater for industries such as online retail, web services, subscription & streaming services, and more. So if you’re interested in an Amazon Competitor Analysis, keep reading!

Displaying Amazon's home page so that readers understand what it sells.

Analyzing Amazon’s Competitors

Amazon has a range of competitors spamming from click and mortar retailers to web services providers. So in this section, we’re going to be taking a brief look at all the competition, some in more depth than others.

Bricks and Clicks Retailers (Indirect Competitors)

Also referred to as click and mortar, this model refers to businesses that sell both online and offline. As it stands, department stores with a diverse range of products, like the ones mentioned below, are able to compete by being both convenient to access and providing digital storefronts.

Amazon has recognised this threat and is planning to open sizable, strategically placed commercial entities of its own.

Walmart

To show readers how Walmart tends to use promotions on its website to increase conversions.

Walmart offers digital as well as brick and mortar storefronts. Between Walmart supercentres, Walmart discount stores, and Walmart marketplaces, it’s fair to say that Walmart Inc. has a lot to offer. Walmart sells products in categories such as clothes, electronics, food, pharmacy, entertainment, sports, and more.

According to Walmart’s corporate website, “For the fiscal year ended January 31, 2021, Walmart’s total revenue was $559 billion.” That’s an impressive return, and when you consider that Net Sales are up almost 9% in Fiscal 2021 from 2020, it’s safe to say that Walmart is getting results.

What makes Walmart so competitive is the Every Day Low Prices motto and one-stop shopping. This essentially means that Walmart sells whatever you need at hugely competitive prices, so it always has a strong appeal. Meanwhile, one-stop shopping provides a physical location to buy everyday amenities at ease. Walmart US, Walmart International, and Sam’s Club are the company’s primary channels.

Nowadays, shipping can cost you a lot in revenue. People don’t want to pay exorbitant shipping costs. Unsurprisingly, high shipping fees are the number one cause of cart abandonment when buying online. It’s, therefore, no surprise that Walmart frequently runs shipping promotions such as the one pictured below.

This approach enables Walmart to remain competitive with its adversaries like Amazon, Target, etc.

Walmart’s Marketing Mix

In terms of marketing, Walmart’s pricing strategy is dictated by the concept of low cost, high volume selling. The company only sells products customers need regularly. Promotion tends to centre around great value offers and advertising its low prices. Finally, Place is comprised of a strong online presence and distribution centres that make it easy to deliver offerings to customers. Brick and mortar stores have also been placed strategically throughout the US, making it no surprise that 64% of Walmart’s revenue comes from department stores.

Walmart Marketplace

Walmart Marketplace is a direct competitor to Amazon’s online marketplace. Both digital platforms enable users to list, sell, and ship items online. Here’s a link to a useful post that highlights how you stand to sell better on Walmart Marketplace.

Target

Amazon vs. Target is a mismatch in some respects, but the company is still an indirect competitor that can swing a punch. Target has got stores in all 50 US states as well as the District of Columbia, according to the corporation’s website. Target states, “We sell a wide variety of food and general merchandise—from clothing to household goods to electronics and toys. We customize the assortment of each store to its neighbourhood and our local guests.”

As noted by MBA Skool.com, “Target offers remarkably price – differentiated products that no other retailer in the industry has been able to match.” Target, therefore, runs a lot of advertising promotions and discounts to make its products competitively priced. Target stores are solely based in the US. The retail company has launched an eCommerce site that lets customers buy products in over 200 countries and territories globally. As far as sales results go, Target is doing well:

“Target’s 2020 sales growth of more than $15 billion was greater than the Company’s total sales growth over the prior 11 years.”

Target’s Marketing Mix (4 P’s Only)

Target uses Price to set itself apart from the likes of Amazon and Walmart. Target runs various promotions and tends to discount products heavily. You can also shop on credit using features such as the Target Visa Card. E-commerce and seasonal discounts are most prominent.

Products include what people need to live day to day and are sold in bulk. Target products also include Pharmacies, Opticians, Photo services, and so on. In terms of place, Target strives to be an all-purpose commercial entity; hence it sells such a vast array of goods and services.

Promotion centres around marketing advertising marketing promotions, for example, “50% Off” and communicating its high-quality products are available at exceptionally low prices. Target also advertises using direct mail, email, flyers, social media, tv, radio, and more.

Online Stores (Indirect Competitors)

Let’s look at some online stores capable of challenging Amazon.

Wayfair Inc.

Wayfair Inc. provides free shipping and sells home store items.Wayfair is another indirect competitor of Amazon. The company sells rugs, home appliances, bedding & baths, lighting, and much, much more. It’s an online home store that seems to be extremely popular. Wayfair is an eCommerce company and was founded back in 2002. The company works with over 11,000 global suppliers.

Wayfair Inc. SWOT Analysis

Strengths

  • Ability to scale with market
  • Adept at turning capital expenditure into revenue
  • Proven track record concerning Go to Market Product Strategies
  • Strong supply chain
  • Employee training and upskilling opportunities resulting in excellent teams

Weaknesses

  • Marketing could be stronger through the establishment of clear, unique product selling points
  • Tends to lose ground to niche stores

Opportunities

  • Lowering the price of shipping would lead to increased profitability
  • Taking advantage of the latest technological trends to automate and remove excess touchpoints
  • Switching to more sustainable means of manufacturing and operating
  • Developing digital assets to sell online

Threats

  • Overly reliant on physical supply chain infrastructure
  • China’s rising prices could hurt Wayfair
  • Demand for increased wages
  • Huge competition on all fronts

JingDong

This Beijing-based eCommerce giant is a massive B2C online retailer with the depth to compete with the likes of Alibaba. It’s also recognised by the name www.JD.com. The company sells pretty much everything – so it’s much like Amazon in that respect. JD.com’s strengths include its status as one of two massive online B2C retailers in China. It has a large selling volume and has built up a reputation as being similar to Amazon in that it is one of China’s largest retailers both online and off.

Jing Dong SWOT Analysis

Strengths

  • It is the nation’s biggest Internet company by revenue.
  • Speedy shipping and excellent all-around service are synonymous with Jing Dong.
  • Excellently placed to cater to the Chinese market in a C2C capacity.
  • JD’s low dependence on third-party sellers vendors, courtesy of primarily offering a first-party marketplace type service, is another bonus.

Weaknesses

Opportunities

  • Beginning to create an EU and or US-centric service.

Threats

  • Much like Amazon, Jing Dong’s standing is threatened by the emergence of niche stores selling their offerings with good marketing and tempting promotions.
  • Environmental policies could also impact growth.

Third-Party Marketplaces (Direct Competitors)

eBay

Ebay's home page for readers to compare to Amazon.eBay is, without doubt, Amazon’s biggest rival. It’s a direct competitor to the hegemonic online marketplace and, for a time, held a larger market share.

For Amazon, it took years of graft and determination to leapfrog its adversary, helped in no small part by Bezo’s emphasis on customer success.

eBay makes its living by charging a percentage commission at the point of sale. As the company holds such a stranglehold on the digital C2C market, they can charge vendors to list offerings. eBay takes a fee for advertising and marketing expenses.

eBay’s website is its primary sales channel. However, eBay is available for integration with third-party e-Commerce functionality providers such as Shopify and BigCommerce. The company operates remotely, relying on consumers to sell to one another; hence it doesn’t need brick and mortar stores to hold inventory. 

Ebay’s pricing is largely competitive with that of Amazon. Shoppers have the opportunity to sift through vendors’ listings to find the product they want at the best price. Both companies are similar in terms of how they handle shipping and what they charge. Amazon FBA ensures that shipping is taken care of on sellers’ behalves, removing negative shipping comments and providing customer support. Ebay’s lack of fulfilment services is a weakness, although eBay makes it much easier to sell internationally than Amazon.

Alibaba

Alibaba free shipping and other promotions to get more customers.This Chinese multinational powerhouse is most certainly in direct competition with Amazon, placing a huge emphasis on e-commerce and retail. Alibaba has a vast inventory making it a massive hit with dropshippers.

The e-commerce company sells everything from coffee to kitchen counters. Alibaba’s digital payment gateway, Alipay, is an online payment service similar to that of Amazon Pay.

Alibaba now promises faster shipping worldwide. Which means it’s attempting to challenge Amazon. Amazon has responded in kind by opening up new fulfilment centres in places such as Ireland and, of course, in the US also.

Interesting times.

Honourable Online Social Marketplace Mentions

Facebook marketplace, Pinterest, and Etsy are what I would consider indirect Amazon competitors.

Facebook

Facebook marketplace is designed for C2C selling and therefore poses an indirect threat to Amazon. Facebook’s marketplace provides a wealth of options at reasonable prices. It’s great for anyone looking to sell and or buy locally.

Pinterest

Pinterest is a massive search engine when it comes to buying products and services. According to SproutSocial, 89% of Pinterest’s US-based users rely on the platform to guide their buying decisions. That’s a staggering statistic that definitely highlights Amazon stands to lose customers to the platform. Especially when you consider that 47% of those who log in to Pinterest are doing so to shop.

Etsy

This online marketplace/basic eCommerce store builder is a super-platform for creatives and those looking to sell artisanal offerings. Etsy is an American company that helps its members sell handmade products, vintage offers, and craft supplies. If you’re passionate about arts and crafts, consider Etsy.

Here are Some Alternative, Indirect Amazon Competitors with Niche Offerings

One of the best ways to counteract the might of a multi-national corporation such as Amazon is to niche down. Below is a list of companies that have taken this concept and fully grasped the idea.

Let’s face it!

No one is taking Amazon head-on as a start-up. Instead, you look at the online marketplace’s selling categories and focus your efforts on a specific area. Dr. Axe, for example, set up his selling points as a reputable, highly educated source of health information. His branding and inbound content efforts are so that you trust him and feel safe buying his products.

That’s what niche sites do well: 1) They (obviously) focus on a niche, 2) market their offerings & build the brand, and 3) establish themselves as the experts.

Thus enabling them to compete with the likes of Amazon and eBay at only a fraction of the cost.

Glossier

This company was founded in 2012 by Emily Weiss, Nick Axelrod, and Michael Harper. The company’s mission statement reads that the intention is to give people a voice through beauty. To achieve this end, the company focuses on creating stellar products with the customer in mind while being as inclusive as possible in terms of its ethics and values. Making Glossier another competitor capable of taking business from Amazon’s beauty and skincare range.

UGMONK

This company was founded by a designer by the name of Jeff Sheldon to produce attractive pieces with minimal aesthetic features. The company sells clothing for both men and women making it well-rounded. Accessories and workspace items are also on offer. Anyone into plain clothes with minimalist designs will love what UGMONK has to offer. Niche stores like this are continuously proving to be a thorn in Amazon’s side.

Dr. Axe

As you might expect, plenty of medicinal supplements and herbal remedies can be found on Amazon. So it’s no surprise that Dr. Axe’s natural health website pops up as having a niche offering being run by a reputable source. In terms of expertise, authoritativeness, and trustworthiness, draxe.com has a huge advantage over Amazon.

Streaming Services (Direct Competitors of Amazon Prime Video)

Netflix

Netflix is an American company with headquarters located in Los Gatos, California. They are described as being an “Over the Top” media service. Interestingly, Netflix, the production company, was founded back in1997. Netflix is a direct competitor of Amazon’s Prime Video.

Now TV

Now TV is another direct competitor of Amazon’s Prime Video. Sky are the creators of the Now TV “Over the Top” streaming platform. The platform is available to users in the UK, Ireland, Germany, and sporadically throughout Europe.

Amazon AWS Alternatives – Web Services Providers

Oracle

Oracle is a massive player when it comes to all things computer technology. The American multinational corporation has headquarters located in Austin, Texas. Oracle sells cloud infrastructure that helps with networking, analytics, storage, and so on.

So, if you’re interested in cloud-engineered systems and enterprise-grade software products, Oracle might be for you. The tech giant was only a few years ago infamous for its aggressive sales tactics that caused a lot of customers to become disillusioned.

Oracle’s marketing strategy relies on segmentation to build customers profiles using vast quantities of data. The company positions itself as an IT all-rounder offering similar offerings to solve customers’ pain points at scale. In terms of business results, Oracle isn’t doing that well financially, having failed to reach its revenue targets as of 2020.

Oracle’s content marketing strategy appears to entail providing useful business and technology information for businesses at all levels. Setting themselves up as thought leaders is one way they’re trying to appeal to target audiences and create trust. Oracle has many blogs that deal with multiple facets of business, so they’ve got a lot of content to build their brand.

Oracle SWOT Analysis

Strengths

  • Demonstrable ability to enter new markets.
  • Strong global distribution network.
  • Meaningful use of capital funding.
  • Successful track record of inventing new products.
  • Superb brand equity.
  • Highly successful within its industry.

Weaknesses

  • Marketing product selling points is sometimes sub-par due to issues with clarity.
  • Struggling to translate historically high R&D spending into meaningful growth.
  • Corporate culture impeding the transition to fresh product segments.

Opportunities

  • Using big data to better understanding their target audience,
  • having improved massively Oracle’s digital footprint.
  • Emerging environmental, technology, and governance policies present opportunities for Oracle to establish itself within a new era of doing business.

Threats

  • China’s growth and rising minimum wage expectations could prove detrimental to Oracle’s vitality.
  • The company’s reliance on a physical infrastructure supply chain model could result in losses as digital becomes increasingly popular and innovative.
  • Intense competition within the industry leaves no margin for error.
  • Compliance with environmental regulations also serves as a potential banana skin.

Microsoft Azure 

Microsoft Azure an Amazon AWS competitor and alternative.

Microsoft Corporation is a technology company that hardly needs any introduction. The Tech whiz offers products in the form of SaaS, consumer electronics, Microsoft Azure (most relevant here), and pretty much everything else gadgety and nerdy. As noted by Microsoft’s annual report back in 2013, the company markets and distributes its products and services using OEMs; distributors and resellers; and E-Commerce.

The company has always liked to pack its products together into what’s known as “integrated solutions.” Microsoft has done well over the years to recognise the importance of building relationships with its customers, which in turn has enabled its sales teams to succeed with minimal fuss.

TechCrunch has a great article discussing Microsoft Azure’s fiscal results as of 2021. The consensus is that Azure is doing exceptionally well, boasting a 45-51% revenue per quarter growth rate from the same time last year.

Microsoft Azure SWOT Analysis

Strengths

  • Superb dedication to service quality.
  • Microsoft’s marketplace continues to go from strength to strength.
  • Wide range of services available to satisfy customer pain points.
  • Capable of entering new markets.
  • Microsoft has impressive brand equity.
  • Industry-leading service and product quality,

Weaknesses

  • Microsoft Azure’s IaaS and PaaS offerings are unavailable to some, depending on their geographic location.
  • Project management has often been criticised for not being concerned enough with the concerns of external stakeholders. 

Opportunities

  • Striving to overtake Amazon AWS as the hegemonic provider of web services.
  • AI is becoming increasingly popular, and Microsoft Azure could harness the potential of new technologies to remove excess touchpoints and therefore lower operations costs.
  • Possibility to enter new, international markets.

Threats

  • Huge competition from the likes of Amazon AWS
  • The current US-China political climate poses a huge threat to the way Microsoft intends to grow
  • Environmental regulations could prove problematic in years to come

Conclusion – Amazon Competitors Analysis

Thanks for reading my Amazon Competitors Analysis. As you can see, there are a lot of industries, markets, and services to which Amazon caters. The company has a plethora of direct and indirect competitors, meaning it’s constantly looking over its shoulder.

The key thing to note about Amazon is versatility and demonstrable ability to succeed irrespective of the competition. Be that through the creation of the Amazon Prime streaming services or the advent of Amazon department stores; the company will do whatever it takes to win.

Amazon has direct and indirect competitors when it comes to:

  • Web Services
  • Subscription Services
  • Streaming Options
  • Third-Party Marketplaces
  • Social Marketplaces
  • Niche Vendors
  • Online Stores
  • Bricks and Clicks/Click and Mortar Retailers

There are many more Amazon competitors to analyse, and indeed I could have admittedly gone into much more detail here. However, for the sake of brevity and not boring everyone to death, I provided a quick analysis and some honourable mentions.

I hope it was useful – thanks for reading!

References

https://embapro.com/frontpage/swotcase/18759-azure-microsoft

https://dynamics.microsoft.com/en-cy/sales/relationship-sales/sales-tips/

https://techcrunch.com/2021/07/27/microsoft-bests-earnings-estimates-as-azure-posts-51-growth-shares-fall/

https://donesafe.com/2019/07/4-reasons-to-choose-an-integrated-solution-over-multiple-point-solutions/#:~:text=What%20is%20an%20integrated%20solution,among%20leading%20HSEQ%20management%20teams.

http://fernfortuniversity.com/term-papers/swot/1433/77-oracle.php

https://www.cnbc.com/2020/06/16/oracle-orcl-earnings-q4-2020.html

https://www.wsj.com/articles/amazon-retail-department-stores-11629330842

https://www.winsightgrocerybusiness.com/retailers/top-takeaways-walmarts-2021-annual-report

https://corporate.walmart.com/newsroom/company-facts

https://www.statista.com/statistics/379508/primary-reason-for-digital-shoppers-to-abandon-carts/

https://www.mbaskool.com/marketing-mix/services/16770-target.html

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