by: Dan Spaeth, Senior Managing Director, IP Advisory

eCommerce remains a major battle ground for the “Bigs”

What are the keys to success in the global eCommerce wars? Lower prices to build share? Invest in R&D and IP? Licensing key technologies.? Expand products? M&A? Killer apps, analytics and customer experiences? All of these or just wait for the next new thing and gobble it up via an acquisition?

Let’s take a peek at Alibaba and Amazon and see what we can learn from them.

Even though Amazon’s revenues are 4X Alibaba’s, both have similar net income and cash flow while Alibaba appears to have a stronger balance sheet. Makes sense if you look at Alibaba’s 18% operation margin vs. Amazon’s 5% (lest we forget, Amazon lost money as a corporate for decades before finally turning in the right direction).

Alibaba operates mainly in China while Amazon operates elsewhere. Despite some major market differences, the goals are the same, “make it easy for consumers and merchants to do business anywhere (and often)."

How is innovation making a difference?

Amazon invests $22.3B in R&D while Alibaba invests $3.6B. Despite the much lower R&D, Alibaba has grown its patent portfolio 10X since its 2014 IPO. What areas of IP and tech. ultimately matter? Drones, digital voice assistants, machine intelligence, AI, data analytics, robotics. intelligent transportation, blockchain? How should each org. balance their portfolios and adjust their strategies?

IP Advisory

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