Gelatin is often used in recipes as thickeners—it is what gives food a lot of its creamy texture. Collagen peptides, on the other hand, when dissolved perfectly, do not change the consistency of beverages or foods.
Collagen gelatin is usually in a brittle, flat, almost papery form, and when mixed with water, turns into more of a gel, whereas collagen peptides are like protein powder and turn into liquid without much texture.
Gelatin and collagen peptides have the same amino acid profile (18 amino acids, of which are considered to be essential amino acids), and an identical source (skin, bones, tissue).
The chemical difference between them is that gelatin only goes through partial hydrolysis, whereas collagen peptides go through a more aggressive one. Peptides are easier than gelatin for your body to digest and absorb, which means the amino acids in collagen peptides, also known as hydrolyzed collagen, may be more bioavailable and therefore more effective.