Comparative study of the competitiveness of Russian and Chinese e-commerce companies in the Russian market Ozon vs Aliexpress as an exampleanalyzed using Porters diamond model

Introduction

In recent years, e-commerce has become an increasingly important channel for retailers to reach consumers. Two of the biggest players in this market are Russian company Ozon and Chinese company Aliexpress. This paper will compare the competitiveness of these two companies in the Russian market using Porter's diamond model.

Factor conditions

Factor conditions are the inputs that a company needs to be competitive in a particular market. In the case of e-commerce, these inputs include technology infrastructure, logistics capabilities, and access to capital. Both Ozon and Aliexpress have strong factor conditions. Russia has a well-developed technology infrastructure, which allows both companies to operate smoothly. Both companies have also invested heavily in logistics, with Ozon acquiring a logistics company in 2019 and Aliexpress partnering with Russian logistics companies. Finally, both companies have access to capital, with Ozon being publicly traded and Aliexpress being owned by Alibaba, one of the largest technology companies in the world.

Demand conditions

Demand conditions refer to the characteristics of the market that a company is operating in. Russia has a large population of over 144 million people, which presents a significant market for e-commerce companies. However, the Russian market is also highly price-sensitive, which presents a challenge for both Ozon and Aliexpress. In addition, Russian consumers are increasingly looking for convenience, which has led to the growth of e-commerce. Both Ozon and Aliexpress have responded to these demand conditions by offering a wide range of products at competitive prices and investing in logistics to improve convenience for consumers.

Related and supporting industries

Related and supporting industries refer to the suppliers and other businesses that support a company's operations. In the case of e-commerce, these industries include logistics providers, payment processors, and suppliers of goods. Both Ozon and Aliexpress have strong relationships with these industries in Russia. As previously mentioned, Aliexpress has partnered with Russian logistics companies to improve its logistics capabilities. Ozon has also acquired a logistics company to further develop its logistics operations. Both companies have also partnered with payment processors to offer a variety of payment options to consumers. Finally, both companies have strong relationships with suppliers of goods, with Aliexpress offering products from Chinese suppliers and Ozon offering products from Russian and international suppliers.

Firm strategy, structure, and rivalry

Firm strategy, structure, and rivalry refer to the way that companies compete in a particular market. In the case of Ozon and Aliexpress, both companies compete on price, product selection, and convenience. Both companies have invested heavily in marketing to increase brand awareness and attract new customers. However, there are some differences in their strategies. Ozon focuses on offering a wide range of products from both Russian and international suppliers, while Aliexpress primarily offers products from Chinese suppliers. Additionally, Ozon offers a membership program that provides free shipping and other benefits, while Aliexpress offers coupons and other discounts to attract customers.

Conclusion

In conclusion, both Ozon and Aliexpress have strong factor conditions, respond well to demand conditions, have strong relationships with related and supporting industries, and compete effectively in the Russian market. While there are some differences in their strategies, both companies have invested heavily in logistics, marketing, and product selection to increase their competitiveness. Overall, the Russian e-commerce market presents significant opportunities for both companies to continue growing and expanding their operations