BCG growth-share matrix for Amazon
BCG growth-share matrix is a business framework that helps companies analyze their business units (i.e. their product lines) or any other cash-generating entities by their degree of profitability.
To show how you can use the matrix for your business, let’s analyze e-commerce leader Amazon, specifically four of its products: Amazon AWS, Amazon Video, Amazon Live and Amazon Echo with Alexa.
Before placing each of these products in one of the four quadrants of the BCG growth-share matrix (i.e. cash cows, question marks, dogs and stars), we need to gather the latest information on market size, product market share and market growth rate.
Amazon Web Services (AWS) is the company’s cloud platform, offering over 200 fully-featured services from data centres globally.
AWS offers reliable, scalable, and inexpensive cloud computing services.
AWS Market – Cloud computing services
The global cloud computing market size was valued at $405 billion in 2021 and is expected to expand at a Compound Annual Growth Rate (CAGR) of 20% from 2022 to 2029 (source).
The market is comprised of three services: IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and SaaS (Software as a Service).
AWS is developed with a combination of infrastructure as a service (IaaS), platform as a service (PaaS) and packaged software as a service (SaaS) offerings.
In 2021, AWS brought $62 billion in revenue, up nearly 37% year-over-year (source). 13% of Amazon’s sales and a whopping 74% of its operating income were generated by AWS sales.
AWS Market share – 33%
AWS has 33% of the market, followed by Azure at 20%, Google at 7% with Alibaba Cloud close behind.
AWS market growth rate – 30%
According to the latest reports, the global cloud computing market is expected to grow by 20% annually.
With a 32% market share, growing nearly 30% year on year, Amazon AWS is a STAR.
Amazon Prime Video is a video streaming service available for Amazon Prime members.
Amazon Video Market – The video streaming service market (SVOD)
According to Statista, revenue in the video streaming market (SVoD) is projected to reach $71 billion in 2021.
User penetration will be 14.3% in 2021 and is expected to hit 18.2% by 2025.
In 2021, there are 1 billion users of video streaming subscriptions.
Amazon Video Market share – 22%
As of January 2020, there are 150+ million Amazon Prime Video users. The service is available in over 200 countries internationally.
In 2018, Amazon’s Prime Video Channels Biz generated $1.7 billion, which was expected to reach $3.6 billion by 2020 (source).
According to Forbes, in 2020, due to people spending more time at home, Prime Video service emerged as another big player in the streaming wars climbing rapidly in the top 3 global video streaming service providers to a 22% market share. The company had announced plans to spend $7 billion on content last year.
Netflix, the leader of the market, jumped to over 200 million streaming subscribers in 2020 and unsurprisingly, announced a $16 billion budget for new content. Total Netflix 2020 revenue came to $25 billion, up from $20 billion in 2019.
Amazon Video market growth rate – 23%
Revenue for the global video streaming services market is expected to show an annual growth rate for the period 2021-2025 of 11%, resulting in a projected market volume of $108billion by 2025.
The latest reports submit that in 2020, Prime Video subscriptions accounted for 23% of SVOD subscriptions, a sharp increase from its previous 14% last quarter (source).
Amazon Video has been growing steadily over the past few years and in 2020 the number of subscribers received a boost. Currently the 2nd most popular video streaming service provider, Amazon Video has still a long way to go and a lot of money to invest. According to the BCG growth-share matrix, Amazon Video is a star.
Amazon Live is a live streaming service that allows sellers to “promote discovery” of their products by hosting their own livestreams for customers on Amazon.
According to data from Sensor Tower, Amazon Live was released in February 2019.
Amazon Live is the company’s second attempt at live-streaming. Back in March 2016, Amazon launched its first foray into live stream shopping, Style Code Live. Style Code Live was focused on fashion-related Amazon products.
Amazon Live – live commerce market
Live commerce is growing rapidly. It’s estimated to already be $60 billion annually. Last year over 430 million people, about 30% of China’s population, viewed livestreams, and in 2020, it’s projected to reach 560 million, or around 39%. Sales from live streams are expected to grow more than 100% in 2020 vs. 2019 (source).
Live-streaming is rapidly transforming into a standard feature for e-commerce. Taobao’s live commerce surged in 2019, achieving a growth rate for live-streaming-prompted-sales of over 150% for three consecutive years, making it the fastest growth model of e-commerce globally. In China, the latest reports show that the live commerce market has reached $66 billion in 2019 and is expected to double in 2020.
During last year’s Singles Day, Taobao saw an increase of more than 220% in the number of merchants participating in live streaming over the past 12 months. Gross merchandise value (GMV) sold during the 2020 Singles Day reached $74billion (source).
Amazon Live market share – N/A
Amazon Live is just starting out so I couldn’t find statistics related to its market share.
Amazon Live market growth rate – N/A
Sales from live streams are expected to grow globally more than 100% in 2020 vs. 2019 (source). Although live shopping has been reported to increase sales, Amazon hasn’t released any statistics on how many sellers use its Live platform yet. To be on the safe side, let’s assume the live platform to have a low market growth.
Live e-commerce is growing exponentially. Remember the internet boom in the early 1990s? This is the stage we are at with shopstreaming and China is the spearhead. With a low market share and low market growth, in a hyper-growth market, Amazon Live is a question mark type of product. With the right resources and strategy, Amazon Live could transform into a star. But if the market conditions are not assessed correctly, it could downgrade into a dog type of product.
AMAZON ECHO + ALEXA
The Amazon Echo with Alexa, the virtual assistant is a smart speaker.
In January 2019, Amazon’s devices team announced that they had sold over 100 million Alexa-enabled devices.
Amazon generated about $1.4 million in Alexa “skill” revenue in 2019 — about 25% of the forecasted $5.5 million. Despite its success with homeowners, Amazon Echo with Alexa is yet to prove a financial success.
Amazon Echo + Alexa – Smart speakers market
Amid the COVID-19 crisis, the global market for Smart Speaker was estimated at $2.7 billion in the year 2020. The market is projected to reach a revised size of $19 billion by 2027, growing at a CAGR of 32% over the analysis period 2020-2027 (source).
Amazon Echo + Alexa market share – 21,6%
Amazon was the leading vendor in the global smart speaker market, having a market share of %21.6% in the second quarter of 2020.
Google is Amazon’s closest competitor, with a share of 17.1% in the same quarter. Chinese vendors Baidu, Alibaba and Xiaomi have become strong players in recent quarters, thanks to growing demand in the Chinese domestic market (source).
Amazon Echo + Alexa market growth rate – 32%
The smart speaker market is growing at a CAGR of 32%.
In 2017, Amazon Alexa had a market share of almost 80%. Google began developing and investing in its own smart speaker and gnawing at Amazon’s lead. Currently with a shrinking 21,6% market share, negative market growth and underperforming revenue, in a growing market, Amazon Alexa is a dog type of product.
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Top 10 assistant robots in 2017
In no particular order, 10 of the best assistant robots in 2017 are as follows:
- Echo by Amazon
The Echo is a cloud-based device built around the premise that being able to make some impressive noise and respond to voice commands while connected to the internet leads to all kinds of functionality. It’s being advertised as a smart music player that can remind you about different things you want and search the Internet, but if utilized to its fullest it can become the central hub of your smart home, controlling lights and connected WeMo, Hue, and Wink devices. It’s a DJ, a book reader, and a robust calendar, and its functionality is going to grow as Amazon continues development. One recent addition is live traffic reporting.
2. Pepper by Aldebaran
With a very humanoid look, Pepper is designed for companionship. During interactions, Pepper analyzes facial expressions, body language, and verbal cues, honing its responses and offering a dynamic and surprisingly natural conversation partner. Originally created for use in SoftBank Mobile’s retail stores in Japan, Aldebaran released Pepper for home use.
It’s the world’s first family robot, a combination of personal assistant, photographer, messenger, storyteller, and telepresence bot. Natural language processing and 360 degree microphones allow it to respond to conversational cues, and two high-res cameras track faces and enable the bot to recognize different users. It’s best for scheduling, entertaining the kids, and providing companionship.
It’s the revolutionary companion robot that improves your everyday life. Open source and easy to use, BUDDY protects your home, entertains your kids, & helps you stay connected with the ones you love. Not content with being just a companion, BUDDY is also democratizing robotics. BUDDY is built on an open-source technology platform making it easy for global developers to build applications.
5. Moorebot Robot
A fully customizable voice interactive robot that delivers tremendous value, convenience and very cool fun to home, business and shops. In addition to being a full featured electronic assistant, Moorebot is an entertainer by itself. The simple compact design can fit almost anywhere. With an open platform, the robot behavior can be customized and upgraded, giving it ability to learn. From fun companion to welcome greeter to business assistant, make your own version of Moorebot.
Your child’s new companion — a brain with loads of heart. You will be amazed with how much Miko can do — be it chatting away about the facts of the world or adapting and responding to your child’s needs. Miko has a wide pool of knowledge and an even wider pool of fun.
7. Personal Robot by Robot Base
It will automate your home and life by connecting to your devices, fitness trackers, locks, switches, outlets, and thermostats. Not only will it keep your home secure, developers say it will also help significantly lower energy bills. The Personal Robot can also handle your scheduling, make calls and entertain your kids.
According to ZDNet, the device’s selling point is that it’s the first AI system with a personality. The Cubic ecosystem includes the home cube, a power badge that connects to ear buds, and a mobile app, so your new friend will always be with you. Cubic is still under development, so the extent of its capabilities remains to be seen, but you’ve got to give its makers points for comparing the power badge to the communicator in Star Trek.
Designed for the connected home, this sleek orb from Ukrainian start-up Branto uses Bluetooth, Wi-Fi, ZigBee, and infrared in a bid to pair with every connected device you could possibly own. Branto also streams music and alerts you remotely if there’s suspicious movement in the house.
10. Cozmo Robot
It’s a gifted little guy with a mind of his own. He’s a real-life robot like you’ve only seen in movies, with a one-of-a-kind personality that evolves the more you hang out. He’ll nudge you to play and keep you constantly surprised. Cozmo’s your accomplice in a crazy amount of fun.
As a bonus, we present you Project Kino.
According to TechCrunch, Project Kino was inspired by ‘living jewelry,’ large bedazzled beetles and other insects worn as decoration in different parts of the world. “The MIT Media lab version is using palm-sized robots that cling onto clothing with magnets. The team has been demoing the work for about a year now and has come up with a wide range of functions for the little wheeled robots.For now, most of the robots’ tasks are decorative. The project’s name derives from the word “kinetic,” referring to the their movement as they reconfigure into different patterns, keeping the clothing designs ever changing. On other surfaces, the robots can etch visible designs in the clothing, as they move around,” writes Brian Heater.
Kino: Kinetic, “living” jewelry for dynamic fashion from Cindy (Hsin-Liu) Kao on Vimeo.