It is believed that in order to make room for Alibaba shares in their portfolios. some investment firms are likely to sell shares of other internet companies to avoid becoming overly weighted towards a certain sector, which may be bad news for Amazon.
With the performance of Amazon 's shares already lagging far behind the broader US stock market this year, a bigger challenge for the firm will be dealing with investor discontent regarding the company's near-zero profit margin business strategy.
For years,Amazon has maintained a low profit margin mainly because it has spent almost every dollar it earns on new investments. Such efforts have enabled Amazon to achieve over 20% in annual revenue growth.
By following this business model,Amazon has turned itself into a supergiant.
As Chinese e-commerce companies continue to internationalize their operations, there will come a day when they will eventually erode the market share of Amazon in the United States and Europe.
Although Amazon entered China nearly a decade ago, its share in the country's online retail market is only 1.9%, lower than Tmall with 52.4%, Jingdong Mall with 18.7% and Suning with 3.5%.
