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Yet Alibaba's revenue for all of 2018 was $55B USD, compared to $232B USD for Amazon. I see that one day sale thing appear in many mentions of Amazon and it mi

Yet Alibaba's revenue for all of 2018 was $55B USD, compared to $232B USD for Amazon. I see that one day sale thing appear in many mentions of Amazon and it might be a little...misleading.

canada_dry 7y ago
Yet Alibaba's operating margins are 15X (31% vs 2%) that of Amazon.
scarface74 7y ago
Revenue is nothing but bragging rights. Profit is what matters.
- mgfist 7y ago
  That's not true. Road to profitability and market cap are what matter. Hypothetical: One business is making $100million in revenue, is losing $20million a year but has enough market cap to grow 10-100x and is spending most of its money on R&D/marketing, while a second business makes $1million in profit on $10million in revenue, but you've maxed out your growth and there's no more market cap, I'd rather be business 1, as you're on the road to potentially make hundreds of millions in profit later on. i.e. I'd rather be Amazon some years back when they weren't profitable than some mom and pop online business that makes enough to pay the mortgage.
  - scarface74 7y ago
    Market cap is just the number of outstanding shares * price.. It says nothing about the quality of the business. Your explanation doesn’t make sense in that regard. Even now, looking at the results, Amazon retail is not a great profitable business. It’s still low margin. No one could have predicted AWS - the true success story. And look no further than YC backed companies. Have any of them become profitable? Even the one company that has gone public - Dropbox - isn’t looking to good these days.
    - crumpets 7y ago
      OP meant total addressable market (TAM).
      - mgfist 7y ago
        Yes my b.
    - mgfist 7y ago
      Yes I meant TAM as the other person commented. Further more, even if amazon retail still isn't profitable (I haven't checked the numbers) AWS still wouldn't have spawned without it. Think of it as a pivot, even though they still kept amazon retail. I'm not really sure what your YC comment has to do with things.
      - scarface74 7y ago
        Its every startups story that they are going to lose a bunch of money and eventually somehow make enough money to justify their evaluations. Not only hasn’t it happen with any YC company, nor has it happen with most of the money losing tech darlings like Uber, Lyft, Dropbox, Mongo,ElasticCo, etc. I believe that Amazon retail is profitable or could be anytime they chose, but not enough to justify Amazons valuation in the foreseeable future. Of course AWS is a different story.
        mgfist 7y ago
        That's simply because being profitable means you don't have anything better to do with your money, which signals to investors that you don't see any more growth opportunity. Mongo/elastic could both become profitable pretty quickly if they needed to (by slowing down hiring and expansion) but they don't do that because they're trying to grow as fast as possible, and they have enough money in the bank to sustain loses. Uber/lyft I think are fucked, but that's a different story. Think of it this way. What do rich people do with their excess money? They invest it. So if you're a company like Mongo/elastic, what do you do with your excess money? Well, invest it back into the business. Both of these companies have years of runway before they go broke or have to go profitable, so it doesn't make sense for them to try and be profitable when there is still so much of the market left in the open.
mcintyre1994 7y ago
Am I missing something or are Alibaba seriously making more than half their annual sales in one single day?
- mattnewton 7y ago
  It looks like the one-day number is gross (ie, no costs subtracted), the other is net profit.
- ABeeSea 7y ago
  Alibaba’s revenue is (primarily) only the fees and commission they charge their sellers. They did $30B of gross sales on that day but probably only collected $1-3B in reportable revenue. Amazon does the same thing for it’s third-party sellers; only the fees and commission make it to Amazon’s top line revenue number for seller sales.
- semperdark 7y ago
  They allow you to order in advance for discounts, and book all the sales on one day as a PR exercise.

Yet Alibaba's revenue for all of 2018 was $55B USD, compared to $232B USD for Amazon. I see that one day sale thing appear in many mentions of Amazon and it might be a little...misleading.

canada_dry 7y ago

Yet Alibaba's operating margins are 15X (31% vs 2%) that of Amazon.

scarface74 7y ago

Revenue is nothing but bragging rights. Profit is what matters.

mgfist 7y ago
That's not true. Road to profitability and market cap are what matter. Hypothetical: One business is making $100million in revenue, is losing $20million a year but has enough market cap to grow 10-100x and is spending most of its money on R&D/marketing, while a second business makes $1million in profit on $10million in revenue, but you've maxed out your growth and there's no more market cap, I'd rather be business 1, as you're on the road to potentially make hundreds of millions in profit later on. i.e. I'd rather be Amazon some years back when they weren't profitable than some mom and pop online business that makes enough to pay the mortgage.
- scarface74 7y ago
  Market cap is just the number of outstanding shares * price.. It says nothing about the quality of the business. Your explanation doesn’t make sense in that regard. Even now, looking at the results, Amazon retail is not a great profitable business. It’s still low margin. No one could have predicted AWS - the true success story. And look no further than YC backed companies. Have any of them become profitable? Even the one company that has gone public - Dropbox - isn’t looking to good these days.
  - crumpets 7y ago
    OP meant total addressable market (TAM).
    - mgfist 7y ago
      Yes my b.
  - mgfist 7y ago
    Yes I meant TAM as the other person commented. Further more, even if amazon retail still isn't profitable (I haven't checked the numbers) AWS still wouldn't have spawned without it. Think of it as a pivot, even though they still kept amazon retail. I'm not really sure what your YC comment has to do with things.
    - scarface74 7y ago
      Its every startups story that they are going to lose a bunch of money and eventually somehow make enough money to justify their evaluations. Not only hasn’t it happen with any YC company, nor has it happen with most of the money losing tech darlings like Uber, Lyft, Dropbox, Mongo,ElasticCo, etc. I believe that Amazon retail is profitable or could be anytime they chose, but not enough to justify Amazons valuation in the foreseeable future. Of course AWS is a different story.
      - mgfist 7y ago
        That's simply because being profitable means you don't have anything better to do with your money, which signals to investors that you don't see any more growth opportunity. Mongo/elastic could both become profitable pretty quickly if they needed to (by slowing down hiring and expansion) but they don't do that because they're trying to grow as fast as possible, and they have enough money in the bank to sustain loses. Uber/lyft I think are fucked, but that's a different story. Think of it this way. What do rich people do with their excess money? They invest it. So if you're a company like Mongo/elastic, what do you do with your excess money? Well, invest it back into the business. Both of these companies have years of runway before they go broke or have to go profitable, so it doesn't make sense for them to try and be profitable when there is still so much of the market left in the open.

mcintyre1994 7y ago

Am I missing something or are Alibaba seriously making more than half their annual sales in one single day?

mattnewton 7y ago
It looks like the one-day number is gross (ie, no costs subtracted), the other is net profit.
ABeeSea 7y ago
Alibaba’s revenue is (primarily) only the fees and commission they charge their sellers. They did $30B of gross sales on that day but probably only collected $1-3B in reportable revenue. Amazon does the same thing for it’s third-party sellers; only the fees and commission make it to Amazon’s top line revenue number for seller sales.
semperdark 7y ago
They allow you to order in advance for discounts, and book all the sales on one day as a PR exercise.