What Alibaba Can Learn From Amazon

by CXOtoday News Desk    Feb 09, 2015


The rising number of eshoppers indicates the strengthening relationship between ecommerce companies and smartphone makers.

According to Gartner, the eCommerce market is expected to grow 70 per cent and touch $6 billion in 2015, and a Google study found over 50 percent of e-commerce queries is already happening on smartphones.

 “The smartphone and tablet shoppers will be strong growth drivers. Mobile phones already account for 11% of e-commerce sales, and their share will jump to 25% by 2017,” Assocham secretary general DS Rawat said. 

That is an obvious reason for ecommerce companies to venture into the hardware market, so as to offer the right ecosystem for consumers. But in the past, the experience of many companies competing in the smartphone market hasn’t been that good.

When Jeff Bezos launched the Fire Phone in 2014, the smartphone market was already crowded, that forced him to promise a better phone than what was already there. Despite having new features like 3D imaging and better scanning facility on Amazon.com, the Fire Phone didn’t sell well.

Now, Chinese e-commerce giant Alibaba Group Holding Ltd has said that it will buy a minority stake in domestic smartphone maker Meizu Technology Co so as to push its mobile operating system through the latter’s handsets, according to a Reuters report.

Alibaba Chairman Jack Ma’s move is attributed to the fact that he is under pressure to improve mobile sales since the run-up to the record $25 billion initial public offering in September, according to Bloomberg.

But it is imperative to understand that the smartphone market is not that easy to make a mark, like Apple or Samsung. Perhaps Alibaba can learn a lesson from Amazon.

Phones—not an easy journey

Selling smartphones under one’s own name requires the acumen of both the hardware and software experts. Not just the ecommerce giants like Amazon, but there have been many examples of failures like Facebook.

Facebook experiment with HTC First didn’t last even a year. As Canalys analyst Daniel Matte said in Forbed: “Facebook’s failure in the mobile game simply boiled down to the fact that users never saw a need for a device, whose features were already encompassed by apps available on iPhones or cheaper Android devices.”

Basically, the phone users don’t just need a device, technology or an app experience but they also want solutions and services. So, the handset manufacturers need to get the requirements right, especially when competing with established players.