December 18, 2019 by Sitara Raman

The Top Ecommerce Companies Worldwide

It’s finally nice to see the buzz around ‘retail apocalypse’ gone (well, mostly) except for the occasional few articles that still show up in news feeds. Retail is very much alive and thriving today. Traditional retailers are proactively accelerating the closure of non-performing stores, revamping store formats and SKU types, investing in resale and rental partnerships, and AI-based technologies to enhance the omnichannel shopping experience; while the Digitally Native brands that have been instrumental in changing the face of retail & CPG companies continue to open brick-and-mortar stores. There are reportedly over 1,000 such stores today and another 800 are expected to crop up by 2023. Global eCommerce sales are expected to hit $4.9 trillion by 2021 and Amazon, the top eCommerce company, might just be increasingly starting to show signs of irrelevance.

Over 2-3 million businesses have dipped their toes into the world of online retailing and yet only a few have done it so well that they have become household names. In this blog post, we take a look at the top eCommerce sites from around the world.

Amazon

amazon

Amazon wasn’t always the online shopping titan that it was today. It had its humble beginnings as an online bookstore before it grew to have the largest revenue in the world. Amazon by itself is the largest cloud platform. It makes use of AWS, the purpose-built cloud platform that today powers not only Amazon but thousands of other internet businesses worldwide. Amazon is today a bookstore, cloud platform, retailer, marketplace, wholesaler, warehousing-fulfillment-logistics partner, and a subscription player through its Prime program. It has also invested in smart devices such as Alexa and Amazon Echo, and is an up-and-coming grocery chain. What sets Amazon apart from all the other eCommerce players are its FBA and Prime programs. Prime is a subscription service that provides shoppers with unlimited one-day shipping and exclusive access to benefits such as video and music streaming. FBA allows third-party merchants to use Amazon’s warehouses and logistics capabilities to fulfill orders. Amazon’s “growth at all cost” model has shaped it into a formidable competitor and an indispensable partner in retail, wholesale, tech and fulfillment for individual sellers and SMBs in eCommerce.

Alibaba

alibaba

Alibaba started in 1999 in China, as a B2B marketplace. Today, it has  many subsidiaries such as the popular C2C marketplace Taobao, B2C marketplace T-mall, Aliexpress, and Alipay. As China’s retail market was and still is highly fragmented, Chinese brick and mortar retailers lacked the scale and skills to extend the same reach as their Western counterparts to their consumers. This was where Jack Ma saw an opportunity to take over the Chinese retail market. When eBay announced its expansion into China in 2003, Ma saw it as foreign intervention and rejected eBay’s buyout of Alibaba’s subsidiary Taobao. Knowing that free was a powerful strategy in China, Ma made Taobao accessible to sellers without an admission fee. Unlike other eCommerce companies, Alibaba does not charge for admission – although it does for marketing and technical support services.This allowed Alibaba to gain the trust of the Chinese sellers (and consequently, consumers) and outdo international competitors within its home domain. The company’s profits largely come from keyword bidding and advertisements which make up 55% of its total profit. It also makes a large amount of profit from big data analytics of consumer behavior. Alibaba has an abundance of data on consumer buying habits and sellers’ marketing strategies and decided to put this data to use in 2017, when they started the Tmall Innovation Centre (TMIC) which was dedicated to R&D. Some of the world’s top brands like P&G, Johnson & Johnson, Mars, and Samsung to name a few have partnered with TMIC to create new products and variants for China based on consumer transactions and behavior they have observed. For example, TMIC and MARS chocolates worked together to find that Chinese consumers would be willing to try spicy chocolate and launched Snickers Spicy in China. From its debut in Mid 2017 till mid-2018, sales of Snickers Spicy surpassed 4.1 million USD. Just recently, Alibaba has considered listing itself on the Hong Kong Stock Exchange to protect themselves from increasing American scrutiny on Chinese firms. However, in light of the current political climate of Hong Kong, it is uncertain whether this venture will be successful.

JD.com

jindong

Alibaba is not the only company to propel the Chinese market into the spotlight. Jindong.com (once called 360buy) was established in 1998 as a B2C company. In the wake of Alibaba’s shadow, Richard Liu Qiangdong knew he had to make his company stand out by any means necessary. That’s why they have established themselves at the helm of the newest technological innovations. In 2015, JD.com and Tencent announced the launch of the “Jingteng Plan”, which provided merchants with a complete solution to establish a brand and promote marketing effectiveness by linking JD.com consumption data with Tencent social data. The “Jingtan Plan” provided brand owners with accurate target consumer groups and diverse marketing channels. This helped brand merchants achieve more effective and accurate marketing. After noting that many of its customers were from rural areas where transportation is scarce, JD reached an agreement with the provincial government of Shaanxi to build China’s largest low-altitude drone logistics network. They have recently decided to build 150 drone launch centres to facilitate delivery in rural areas. As for future endeavours, they plan to create drone and airplane centres and advanced drones that can carry up to 1 metric tonne. JD has also established a strategic partnership with Walmart to further Chinese integration of their resources, platforms, and supply chains. 

eBay.com

ebay

One of the original eCommerce giants, eBay was founded in 1995 by Pierre Omidyar as an auction site and one of the first ones to allow P2P transactions. eBay’s success was attributed to its then unique business plan: allowing individuals or businesses to list new or used items for auction for a very low fee. During the mid-2000s, it managed to become the go-to destination for online transactions and a hub for collectors of eclectic items to exchange goods and expand their collections. However, their reign was not permanent. While Amazon consistently adapted itself to international markets, eBay chose to use the same marketing strategies globally, resulting in the failure of their attempts to expand in China and India. It was also hampered by its decision to hire non-technical executives from outside the internet industry, which it believed would bring in a fresh flow of ideas. The executives had little to no knowledge on how to run an internet company, which caused eBay to miss out on opportunities that its contemporaries were making use of such as data analytics. While it’s no longer dominating the online eCommerce scene as it once used to, eBay still has carved its own niche into the market thanks to its exclusive bidding feature. Every sales transaction on the store nets eBay a little share in the sales amount. This little share as of 2017, accumulated to $9 billion in revenue. However all is not lost for eBay as it’s revenue growth could still inch ahead of Amazon’s in the coming holiday season (Q4 2019)

Rakuten

rakuten

Known as the Amazon of Japan, Rakuten is a Japanese electronic commerce and online retailing company based in Tokyo.  It’s both a B2B and B2C platform that, like Amazon, provides reward points and daily deals to customers. Rakuten operates Japan’s biggest internet bank and is its number one credit card company by transaction value. 90% of internet users in Japan have registered an account on Rakuten. In the late-90s, companies like IBM were also offering eCommerce services, but these were tightly regulated and controlled with exorbitant fees. Rakuten founder Hiroshi Mitakani decided that his venture should be an online shopping mall that would instead empower the merchants at a low price. Merchants were given the ability to customize their storefronts on site, something unheard of at the time. In the early 2010s, Rakuten began aggressively expanding outside of Japan. It has purchased numerous foreign assets and has converted them into overseas Rakuten branches. Its major acquisitions include Buy.com, PriceMinister, Ikeda, Tradoria, Play.com, Kobo Inc, Viber, Ebates, OverDrive, Inc, Slice, and The Grommet. It also attempted to be a contender to Netflix through its acquisition of Wauaki.tv, a Spanish streaming service. In 2015, Rakuten began capitalizing on the emerging trend of cryptocurrency and acquired Bitnet – a bitcoin payment processor. It also provides an online grocery delivery service in Japan as part of a partnership with Walmart.  However, despite their efforts, Rakuten has yet to have international appeal, as the overwhelming majority of its customers are exclusively from its home country. 

Zalando

zalando

Those with an interest in fashion will probably have a lot to say about the Berlin-based company Zalando. Its founders Robert Gentz and David Schneider, were inspired by the American footwear retailer Zappos, and wanted to create a German counterpart. When it was founded in 2008, Zalando sold only footwear before including other apparel items. Just one year later, it began expanding to cover more than half of Europe. Zalando’s modus operandi is a customer-centric approach – it offers several payment options such as “payment after delivery” or “cash on delivery” and allows customers to return items within 100 days after purchase. It currently offers more than 300,000 products across 2,000 brands and also runs an off-price website called Zalando Lounge, besides operating several outlet stores across Germany. The company appears to be sacrificing short-term profits for long-term growth, shown by its stagnation until 2014 and its slow but steady progress since then.

Walmart

walmart

Walmart started out as one of the oldest brick and mortar retail stores before adapting with changing times and entering eCommerce. In 1945, Sam Walton bought a branch of Ben Franklin stores with a vision in mind: Selling products at low prices to get higher-volume sales at a lower profit margin. By the 90s, it exploded into a national phenomenon in the United States and became America’s largest retail company. By the mid-2000s, it began expanding internationally, in South America, the UK, Africa, East Asia, and the Indian subcontinent. It is also one of the few traditional retailers like Target, to remain a high performer amidst bankruptcies and store closures thanks to its proactive investment in experiential aspects such as in-store pick up, self-checkout, curbside pickup, grocery delivery, and portfolio diversification through D2C acquisitions. Walmart is the world’s largest retailer by revenue, with US$514.405 billion, according to the Fortune 500 list in 2019. It is also the largest private employer in the world with 2.2 million employees. In fact, it recently surpassed Apple to become the world’s third largest online retailer, and accelerated its quarterly eCommerce growth to 43%. Since 2016, Walmart has acquired various D2C brands with the intention to strike a chord with the Millennials and Gen-Z shoppers. This strategy however, has started backfiring and Walmart has already unloaded one of its acquisitions – ModCloth. It has also made partnerships with Google to bring Walmart items to Google Express, and launched its own fashion line to compete with Amazon’s ever growing apparel repertoire. In an age when many conventional retailers are struggling to adapt to the shifting market, Walmart is a reminder that an old dog can learn new tricks. 

Otto

otto

 

Specializing in fashion, sports, electronics, and home equipment, Otto started out as a mail order company. It is based in Hamburg, Germany and was founded by Werner Otto in 1949. When they started venturing into eCommerce in 1995, only a fraction of Germans had internet access, which gave them a head start to develop their platform that other companies who joined late in the game did not have. Every second washing machine purchased on the web and every third TV is provided by OTTO, making it a leader in providing home products on the web. What sets Otto apart from Amazon is its greater commitment to service. Otto allows customers to be involved in the reinvention process of the company, ensuring maximum engagement and interaction between the consumer.  Just recently, Otto has been dabbling into the healthcare field by making intelligent catheters, designed to create a phantom image of the human body for medical research purposes. Otto has also pitched in to help tackle the problem of climate change. While it has operations in over 20 European countries, it has yet to tap into markets outside of the European Union. 

Flipkart

flipkart

India’s answer to Amazon, Flipkart, is well known. Founded by Sachin and Binny Bansal in 2007, the company focused on book sales before expanding into other product categories. Flipkart offered the convenience of buying books to customers without stepping outside their homes or offices. Considering that most of their initial customers were corporate employees living and working in large metropolitan areas, the convenience offered by Flipkart freed the customers’ leisure time on weekends. Flipkart managed to solve the biggest problem anyone ordering online in India had – reliable delivery of goods. By tying up with national courier companies in the initial days, they were able to ensure their first stage of their marketing via word of mouth, and set up their own delivery service, which was unheard of in the Indian eCommerce scene at the time. As of March 2017, Flipkart held a 39.5% market share of India’s e-commerce industry. Just last year, Walmart announced that it would purchase Flipkart for 16 billion USD, making it a greater rival for Amazon in the Indian market. 

Shopify

shopify

Shopify is Canadian multinational e-commerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems. Shopify offers online retailers a suite of services such as payments, marketing, shipping and customer engagement tools to simplify the process of running an online store for small merchants. It has more than 1,000,000 businesses in approximately 175 countries using its platform as of December 2018, with total gross merchandise volume exceeding $41.1 billion. Shopify offers an extensive suite of tools for creating and managing an online store. Shops are fully hosted, and the company delivers a top-notch content-delivery network at no additional charge. Virtual storefronts can also be designed using one of 100 customizable themes. Shopify has proudly touted itself as “the anti-Amazon.” While Amazon consolidates many brands and sellers within its marketplace, Shopify gives individual companies and entrepreneurs autonomy by allowing them to create their own branded store. Shopify now has a million businesses using its service. From 2016 to 2018, the platform generated $183 billion in economic activity around the world.