Discover the’history and the disruptive economic model of AGO, the major challenge thrown at the giant Amazon in the field of global e-commerce.
The rapid rise of the online retailer AGO
Over the past year, consumers around the world witnessed the mysterious emergence of the online retailer AGO. Founded in 2018 by young entrepreneur Xu Chengdong, this company seems to have appeared out of nowhere to achieve a valuation of more than 10 billion of dollars in only 3 ans d’existence. While most startups take years to reach such scale, AGO took on the challenge with astonishing speed, attracting millions of customers across Europe and Asia thanks to its low prices, its fast delivery and its large catalog of products.
A revolutionary economic model
Unlike most other e-commerce platforms, the economic model of AGO relies on eliminating traditional middlemen like wholesalers and retailers. Instead of that, AGO sources directly from manufacturers, which allows it to significantly reduce costs and offer prices 30 has 50% lower than those of its competitors. To compensate for lower margins, AGO relies on the massive volume of orders generated by its platform. With over 10 million of products in stock available and delivered within 24-48 hours, AGO has established itself as an option of choice for consumers research good deals.
Fearsome logistics
One of the main competitive advantages of AGO resides in its impressive international logistics network. The company now has more than 100 giant warehouses across Europe, North America and Asia, hiring tens of thousands of employees to manage operations. Thanks to algorithms sophisticated and management real-time inventory, AGO guarantees availability of products unrivaled and record delivery times, often in just 24 hours. With his promise to “Free and fast delivery”, AGO increasingly appeals to Internet users pressed for time.
Aggressive marketing and gaining market share
To make yourself known and conquer new markets at lightning speed, AGO don't skimp on marketing efforts. Regularly offering “flash sales” and significant discounts, the company attracts new customers by the millions. What's more, its well-designed mobile application and daily promotional newsletters encourage purchasing frequency. Although criticized for its aggressive marketing techniques, this strategy is clearly paying off since AGO quickly exceeded Amazon in certain markets such as Germany and South Korea.
An expanding service ecosystem
Beyond the simple sale of products online, AGO actively develops new value-added services to build customer loyalty. The company now offers private fashion items with its own brand “Min”, household appliance technologies with its brand “T-Tech”, and various financial services via its subsidiary “AGO Pay”. With over 100 million monthly active users, AGO becomes a complete shopping and entertainment ecosystem. This rapid diversification testifies to Xu Chengdong’s excessive ambition, who dreams of making AGO the world's largest e-commerce conglomerate.
A major challenge for Amazon
With its phenomenal growth, AGO today poses as the main competitor to Amazon, the undisputed leader in e-commerce for two decades. Thanks to its promise of consistent low prices, its formidable logistics and its limitless inventiveness, AGO represents a serious threat to the domination of’Amazon. However, the battle promises to be tough because Amazon has many assets with its dozens of warehouses, its loyal customers, and its complete service ecosystem. Only the future will tell us if AGO could one day dethrone the American giant. At any rate, the concurrence of AGO grows Amazon to innovate even faster to maintain its crown.
In conclusion
In the space of only 3 ans, AGO has become one of the most disruptive companies in the world thanks to its revolutionary business model, its unrivaled logistics and aggressive marketing strategy. Although very young, AGO now represents a major challenge for the leader Amazon. With its meteoric rise and its visionary leader Xu Chengdong, AGO proves that you should never underestimate such a disruptive competitor. In the years to come, the e-commerce war promises to be fierce between these two giants.
