Online Shopping: How Amazon and Alibaba Are Taking Over the World (And Your Wallet)

On 2016’s Single’s Day, a holiday created by Chinese singles that is celebrated on November 11, online shoppers spent over 17 billion dollars on the Chinese online shopping website Alibaba. According to CNBC, that number completely crushes the 2.72 billion spent on Black Friday in 2015, infamous for the mobs of crazed holiday shoppers waiting for hours outside shopping malls. With the rise of Amazon, Ebay, Alibaba, and other online stores, physical stores like Barnes and Noble are a dying breed, unable to compete with the sheer convenience of having products delivered right to your doorstep (or better yet, downloaded straight to your phone).

Of course, plenty of physical stores are still alive and kicking, but online shopping is booming across the world. According to Fortune, there were more online shoppers on 2015’s Black Friday than offline shoppers for the first time-103 million of them, compared to 102 million offline shoppers. Traditional brick-and-mortar stores like Walmart and J.C. Penny have all opened their own online stores, recognizing that if they do not, they would be absolutely destroyed by Amazon.

MVHS students are well aware of why online shopping has become so dominant. “With online shopping, you never even have to leave your house,” senior Derek Wang said. “You can get everything delivered to you right from the safety of your home. Plus, it’s easier to find good deals online than in a physical store.” Because of cheaper prices and convenience, thousands of people like Derek now buy their books through Amazon, download their music through iTunes, and purchase their games through Steam.

Senior Derek Lai adds that choice is another big factor in the success of online shopping. “There’s so many more choices when shopping online,” Lai said. “You can find practically anything on Amazon or Ebay.”

The Mind on Online Shopping

Part of the reason why online shopping has become such a big business is the clever psychological tricks online retailers use to convince browsers to become buyers. According to Tower Marketing, online retailers wield many different marketing tricks to sell more products. Using sales deadlines and warnings that an item is going out of stock triggers the fear of missing out in the minds of shoppers, perhaps causing them to make their decisions more rashly than usual. Online retailers understand that shipping costs is the main reason people don’t buy online, so they offer discounts on shipping to draw people in. Studies show that coupons cause lower stress and more happiness in recipients, which leads to a more willing buyer. Another study by the University of Singapore demonstrates that easier access to information about what they’re buying makes buyers feel more comfortable, so smart online retailers provide users with easy access to reviews, seller credentials, and shipping policies, creating trust.  

Adding on to this, the algorithms used by Amazon and other online retailers tailor what is shown to the user to their tastes and desires, greatly increasing the chance the user finds something they actually want to buy. They also tend to place positive reviews first, so, by the recency effect, where people tend to remember the first and last items of a series best, users get a overall better impression of the product. Online retailers make sure their sites run smoothly and that buying things is as fast and smooth as possible, so people can act on their impulses in seconds. Unlike going to physical stores, going on the Internet creates absolutely no commitment, so it’s important to make buying things simple.

Shadier Sides

The Internet hasn’t brought only good to the realm of commerce. Piracy and fraud are increasingly large problems as online shopping grows. According to Forbes, online fraud attempts are projected to increase by 43 percent this year. It’s much easier to steal someone’s credit card number online than it is to steal someone’s card out of their wallet. Fraudulent online stores and offers are common on the Internet, attempting to scam online shoppers out of their hard earned cash using the lure of low prices. Furthermore, piracy of music, movies, and video games have been made much easier by the advent of the Internet. “It’s so simple to get something for free off the Internet nowadays,” said Derek Wang. “It’s easy to forget that it’s illegal.”

According to Binpress, in order to combat the stealing of credit cards online, retailers can examine the difference in the IP address of a buyer and their billing address. If the person trying to buy something is in a completely different country than their address, it’s likely that the person has stolen the credit card. Unusually large purchases is also a warning sign that a person has stolen a credit card. In general, it’s best to stick to reputable sellers on secure sites like Amazon, and remember that if something seems too good to be true, it probably is.

Why Go Offline?

Physical stores still have their benefits over online stores, which is why many MVHS students still buy from them. “When you’re shopping online, you don’t know for sure the quality of what you’re buying and it might break during the shipping. And shipping still takes some time,” Lai said. “Offline, it’s harder to get hacked or scammed. And for some people it’s probably more enjoyable to shop offline.”

“Online, people will probably spend more money, because it feels more abstract than a physical store,” Derek Lai said. “It’s easy to just get sucked by all the choices and it’s harder to manage your money when it’s just a credit card and not actual cash.”

Online shopping is a modern miracle, but it’s too easy to get addicted to the power of having the world at your fingertips. The Internet has changed the way we shop, and for the most part in a good way, but be careful not to buy too many things, or the iron chains of credit card debt could be coming your way.

(Cover image – Flickr/Robert Scoble)