Amazon and Alibaba Use Same Means to Different Ends
In buying Whole Foods, Amazon is following a trail blazed by Alibaba
Still, the two companies’ strategies aren’t exactly alike.
Some of this is down to history. China lacks established retail giants like Wal-Mart or Costco that have mastered how to distribute goods from producers to supermarkets. Meanwhile, online shopping accounts for a much larger share of the retail market in China than the U.S.
For Alibaba, buying into physical retail companies isn’t about improving its distribution. Instead, it points to its ambitions to offer its services to anyone selling goods, online or offline. In recent years, it has bought a majority stake in department-store operator Intime, a 20% stake in electrical-appliance retailer Suning and minority stakes in a couple of supermarket chains.
Like Amazon in the U.S., Alibaba has already become the dominant force in China’s e-commerce market. But as both move down from the clouds into the real world, their aims contain crucial differences.
Write to Jacky Wong at JACKY.WONG@wsj.com