Alibaba Is Quietly Copying JD.com's Business Model
Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD), the two largest e-commerce players in China, mainly operate with different business models.
Alibaba's online marketplaces charge listing fees and commissions for third-party sellers, use third-party logistics services to fulfill orders, and don't take on any inventories. JD is a direct retailer that takes on inventories and fulfills orders with its own logistics network.
JD generates higher revenue than Alibaba but operates at much lower margins. Alibaba founder Jack Ma once claimed that JD's low-margin approach would "end in tragedy," while JD founder Richard Liu declared that Alibaba's dependence on third-party sellers exposed its shoppers to counterfeit goods.
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Source Fool.com
