Why Jim Cramer likes Alibaba over Amazon.com

CNBC's Jim Cramer on Monday reiterated his bullish view on Alibaba Group after Jefferies initiated coverage of the China Internet retailer with a "buy" rating.

"I regard Alibaba as Amazon, but it also has earnings," Cramer said on "Squawk on the Street." "So you have the long Aliaba, short Amazon. That's not a bad trade."

Jim Cramer discusses the Alibaba IPO at the NYSE.
Adam Jeffery | CNBC
Jim Cramer discusses the Alibaba IPO at the NYSE.

So why won't Cramer get behind Amazon right now?

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"Amazon likes to spend, spend, spend," he said, adding Alibaba also benefits from a different business model, without the overhang of an inventory or warehouses.

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The big difference between the two rivals, though, is that Alibaba is deeply rooted in China, where "the Chinese are spending like mad."

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In its note, Jefferies pointed out that Alibaba is the largest player in China e-commerce, but currently sells to less than 25 percent of the country's population.

—CNBC's Peter Schacknow contributed to this report.

DISCLOSURE: When this story was published, Cramer's charitable trust did not own Alibaba Group or Amazon.com.