Better Buy: Alibaba vs. JD.com
Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD) are the two largest e-commerce companies in China. Alibaba is expected to control 50.8% of the market this year, according to eMarketer, as JD claims 15.9%.
However, JD is actually China's largest direct retailer in terms of revenue, since its first-party marketplace takes on its own inventories. Alibaba's Taobao and Tmall marketplaces primarily connect merchants to buyers, generating most of its revenue from listing fees and commissions.
I compared these two companies last August and believed that JD's simpler business model, firmer first-party logistics foundations, and lower dependence on third-party sellers made it a better buy than Alibaba. JD stock has stayed nearly flat since I made that call, but Alibaba has declined about 20%.
Source Fool.com
