Just within the first day since IPO Alibaba has tripled the stock price, reaching a new level of success on its debut in North America. However, Jack Ma, the founder of Alibaba, has no intention to slow his pace. His ambition in competing Amazon in its home ground is not surprising. Both business models follow the basic structure of e-commerce, however, Alibaba has certain advantages that may change up the game in North America. Alibaba offers an open marketplace which not only facilitate channels for branded companies but also small businesses as well. As a facilitator Alibaba does not sell products directly to consumers which allows them to abandon warehouses and the heavy cost that comes with it. As a result Alibaba is greatly more profitable than Amazon, with margins as high as 40%. Furthermore, the vast market in China has widen the gap even more.
It seems like Alibaba is the real deal, but the real question is, is Alibaba capable of sharing a part of the pie in North America? Many obstacles are in the way and Alibaba does not to seem to be able to solve them anytime soon. The major problem is that can Alibaba fight its way into the market share of North America with costly expense? After all it is Amazon’s turf and Alibaba would need loads of cash to fight the battle of market share. On top of that Alibaba’s business model may not adapt the already existing e-commerce system set up by Amazon. With these critical issues it is difficult to judge if Alibaba would recreate its immense success on North America, however, stakeholders strong believe in the chance.