The overlords of e-commerce, Jeff Bezos and Jack Ma, are taking a moment to declare victory, each in his own way, and engage in more than a little chest thumping.
Amazon founder and chief executive officer Bezos said in a lengthy letter to shareholders late Tuesday that his company’s aggressive corporate culture works, noting that, “This year, Amazon became the fastest company ever to reach $100 billion in annual sales.” (The value of all the goods sold through Amazon, including third-party sellers, would be significantly higher).
Alibaba said in a filing with the Securities and Exchange Commission that “as of March 31, the end of its fiscal year 2016, it has become the largest retail economy in the world as measured by annual gross merchandise volume on its China retail marketplaces.”
In declaring itself top banana, Alibaba is taking something of an apples-and-oranges approach, since it is counting the value of the goods sold through its platform instead of its own revenues. Wal-Mart in its fiscal year ended Jan. 31 saw revenues decline 0.7 percent to $485.65 billion.
Last month, Alibaba said that, with 10 days left in its fiscal year, its China retail marketplace platforms had already logged GMV of 3 trillion yuan, or about $476 billion.
Alibaba raised $25 billion in its 2014 initial public offering, signaling a big push to be a global player and to take on Amazon and Wal-Mart on their home turn.
Wal-Mart has been retooling and trying to catch up online and capitalize on its gigantic fleet of stores, while Amazon has motored ahead and is growing on several fronts.
Bezos – whose company came under fire last year for having what some see as a driven, approaching on brutal, corporate culture – said Amazon’s style works, pointing to the twin successes of its marketplace and its $10 billion Web services business. (Fashion is also in the Amazon crosshairs).
“What’s going on here?” Bezos wrote. “Both were planted as tiny seeds and both have grown organically without significant acquisitions into meaningful and large businesses, quickly.…Is it only a coincidence that two such dissimilar offerings grew so quickly under one roof? Luck plays an outsized role in every endeavor, and I can assure you we’ve had a bountiful supply.
“But beyond that, there is a connection between these two businesses,” he said. “Under the surface, the two are not so different after all. They share a distinctive organizational culture that cares deeply about and acts with conviction on a small number of principles. I’m talking about customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term, and the taking of professional pride in operational excellence.”
Bezos described corporate cultures as “enduring, stable, hard to change.”
“If it’s a distinctive culture, it will fit certain people like a custom-made glove,” he said. “The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another.”
He said Amazon takes risks and has both lost and won (but won big) because of it.
“We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs,” he said.
But Amazon isn’t the only one going big. Ask Jack Ma.