Saturday, March 07, 2015

A win-win digital marketing

Cooperation exists between companies seems to be very common. By cooperating with other companies, a company could focus on its own advantageous side and take advantage of other companies’ expertise. As a result, all companies could get benefit out of the cooperation. However, it is rare to hear that two rival companies cooperate with each other.

Recently, amazon is looking to Alibaba for help in China. As well known, Alibaba enjoy the largest market share of e-commerce in China. Many Chinese people go to Alibaba for online shopping. As data shows for 2014, Alibaba holds 61% market share of e-commerce in China. However, Amazon only has 1.3%. Alibaba and Amazon seem to be direct competitors and not likely to cooperate with each other. Actually, Alibaba and Amazon have different business models.  Amazon sells goods directly to consumers, while Alibaba is an intermediary that connects sellers and buyers, and it makes most of its money from selling ad space on its platforms. Therefore, it would not be a conflict for their cooperation.

By working together, Amazon could get more traffic from Alibaba because most online shoppers in China often go straight to Alibaba's platforms when they want to search for a product. If they work together, more online shopper would go to through Alibaba. The cooperation would also benefit Alibaba by having more prestigious brands to sell on Tmall. Therefore, both Alibaba and Amazon would benefit from this cooperation.

No comments: