Cleaning the Aisles.

Retail powerhouses, Alibaba and Amazon, grew from similar roots. Both e-commerce giants were started by individuals obsessed with technology disruption. Now, they dominate the world’s largest economies, China and the United States, building ecosystems of services around the mutual mindset that the customer is the center of their universe.

In comparison, in terms of revenue reports, as of August of last year, Amazon is the clear breadwinner, outweighing Alibaba 177.9 billion (USD) to 23.82 billion (USD). Per share, Amazon made $314.52 versus Alibaba’s $10.52. More in depth metrics however, such as operating margins and quarterly earnings progress, reveal Alibaba had substantially more impressive numbers. Alibaba held a 32.68% operating margin compared to Amazon’s 2.31%. In terms of quarterly earnings, Alibaba had a staggering 94.50% growth to Amazon’s -77.00%. This can be attributed to more than just the lower trading costs. Amazon’s price-earnings ratio is 326 while Alibaba is at 37.11.

Alibaba is already operating in a much larger market, double that of the United States, with China being the largest. For approximately 20 hours a week, there are 560 million internet users within the country. Out of that number, Alibaba has 350 million active customers responsible for skyrocketing sales across not one, but two of their retail sites.

These two companies, when dissected, are operating with two different business models. Amazon began as a B2C business, business to consumer whereas Alibaba started off as a B2B, business to business. Now, Amazon is operating a marketplace involving more third-party transactions. Alibaba has expanded from B2B to both business to consumer and consumer to consumer, which has widely broadened their playing field.

Despite the different business models, both are impacting the world’s retail environment dramatically. Alibaba is using modern technology with pop-up stores including their online payment system, electronic price tags, facial recognition, and even the ability to virtually try on items. Jack Ma, co -founder of the Alibaba group, has made it apparent that the company is taking on a “retail as entertainment” approach, by curating an experience rather than just simply business.

On the other side of the game, Amazon, most recently, is changing the way Americans buy groceries. With the recent acquisition of Whole Foods and an immediate stock jump of 27%, it is safe to say, people are on board. Jeff Bezos, Amazon’s CEO, has expressed his goal to cut prices while maintaining a commitment to high quality products. In-store benefits and transformed POS systems are “just the beginning” according to the head honcho. What does he mean exactly? Well, maybe the recent unveiling of the Amazon Go store with its Just Walk Out technology can give us a clue. Yes, Amazon has created a store where customers can literally just walk out, no lines, no cashiers. Oh, the possibilities.

These ecosystems created by these two companies give the brick and mortar stores no choice, but to embrace technology and rise to their level. Most, however, are playing catchup with incremental innovation. Both companies are blurring the walls of these brick and mortar stores with online commerce.

Disruption is here and happening, next we will bring you the retailer whose aisles are being cleaned out by Amazon or Alibaba.