uploads///On Demand Services Industry

Amazon Expansion Plans to Leverage On-Demand Services Industry

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Amazon Home Services

As we discussed in the previous parts of this series, one of the Amazon’s (AMZN) initiatives to become a central hub for shoppers includes its home service allowing consumers to booking a handyman. The e-commerce giant is now planning to expand its on-demand service called Amazon Home Services to 15 cities in the US.

Amazon Home Services currently offers about 900 professional services that include booking a professional service for mounting a TV on the wall, plumbing, or installing a garbage disposal.

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Tapping into the gig economy

The objective of this service is to leverage the growing on-demand services industry that is projected to serve 7.6 million Americans by 2020. As shown in the above chart, the new “gig” economy can offer 7.6 million service providers for these on-demand services by 2020 as compared to the current number of 3.2 million. For more information on this rising economic phenomenon, please refer to The Rise of the Gig Economy.

As we discussed in Part 2 of this series, Amazon recently launched Amazon Flex, a service that enables drivers to deliver products in Seattle by signing up for shifts through an app. Amazon faces competition from players such as Yelp (YELP), Angie’s List (ANGI), and TaskRabbit that have already ventured into this space and have dominated Yelp for years.

Like Amazon, Alphabet (GOOG) also aims to capitalize the growing on-demand service industry, which we will discuss in the next part of this series.

To get broad-based exposure to Amazon, you may consider the PowerShares QQQ Trust, Series 1 ETF (QQQ), which invests 3.5% of its holdings in Amazon.

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