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Business Management

Fight! Amazon and Alibaba clash over foreign markets

Once upon a time the US and China had very little in common apart from deep political and cultural antipathy but today they want each other’s markets. And two companies will go head-to-head in a contest that will be emblematic of the evolving internet globalisation scene.

Handily for media watchers, both Amazon and Alibaba are colourful combatants that embody their countries. Jeff Bezos’s Amazon is a great American Dream story, the Everything Store that sees opportunity in every adjacent market and just can’t stop or get enough. Jack Ma’s Alibaba Group is the embodiment of the new China, enjoying the wild ride of capitalism, a new native middle class and the opportunities wrought by the internet.

Both can prosper but neither wants to accept home dominance. Just this week Amazon announced it was opening on Alibaba’s Tmall.com e-commerce platform in a tacit admission that international sales are not growing at the wanted rate. China, the world’s largest economy and with an e-commerce sector in hyper-growth, is particularly challenging and stepping onto its global rival’s estate is a case of ‘if you can’t beat them join them’ for Amazon.

That news came just after Alibaba had said it was opening a Silicon Valley datacentre to boost its Aliyun cloud services platform that will now compete locally with the rampantly successful Amazon Web Services. Similarly, Amazon has dipped its toes in Chinese waters with AWS and both are profitable ways to externalise infrastructure used for respective trading platforms.

These moves show that, much as we all pay lip service to the wondrous phenomenon of globalisation, it’s not always easy to translate local success to meet cultural, political and other variations around the world. We no longer live in the age where the US might see Chinese as ‘commie’ or ‘red’ or where the Chinese might disparage ‘running dogs of the west’. But the battle to conquer the world’s biggest markets is likely to become a case study for how the internet economy changes and matures.

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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