Amazon is successfully taking market share from established brands in several product categories, analysis from market-research firm 1010data purports.
According to 1010data, Amazon is changing the dynamic for category leaders by putting itself in direct competition via its own private-label brands.
Amazon features private-label products for more than a dozen categories, including batteries and car speakers. Using consumer spending data representing millions of consumers, the research firm analyzed sales trends from September 2015 to August 2016 for these two categories.
According to 1010data, estimated online battery sales were approximately $113 million this past year, and 94 percent of all batteries sold online are sold through Amazon sites. Among the top 10 battery brands, the private-label AmazonBasics brand accounts for about one-third of battery sales online, which is up 93 percent from the prior-year period.
The online speaker market, meanwhile, generated an estimated $1 billion in sales this past year. The Amazon Echo is the most popular speaker sold online, said 1010data, which also noted that Amazon and its third-party sellers command 89 percent of total online speaker sales. The Echo brand reportedly holds a 45 percent market share among the top 10 brands sold on the Internet based on dollars sold. Sales of the Echo have grown 67 percent year over year, said 1010data.
“No matter the market, the challenge for brands in an increasing number of categories is that Amazon is the top online channel,” said Jed Alpert, 1010data marketing senior VP. “And Amazon is leveraging its dominance to sell its own private-label brands which compete with traditional suppliers.”
The reasons for the e-tailers success vary, said Alpert. The AmazonBasics batteries are extremely price competitive and exist in a market with very little brand loyalty, he noted, while the Echo speakers are “truly innovative products that are redefining the market.”
“The bottom line for brands,” he concluded, “is they can no longer view Amazon as solely a channel and need to acknowledge Amazon as a competitor.”