Will Google and Amazon disrupt the local services market in Australia?
Internet giants Google and Amazon have both recently taken steps to compete in the emerging on-demand/home services/local services marketplace. And when you look at the numbers it is easy to see why. The army of individuals and small businesses they want to harness – plumbers, electricians, handymen, dog walkers – are servicing a multi-billion market in the US.
So who better placed to provide a seamless, hassle-free experience than two internet behemoths? Surely they can smooth out the experience of hiring a tradie, which can feel like playing Russian roulette. Poor workmanship and customer service are common gripes, as is making sense of the qualification requirements required for the task at hand.
A sector ripe for ‘Uberfication’
Even though there are numerous US-based players in this space – Angies List, TaskRabbit, Pro.com and HomeAdvisor, no one entity has managed to dominate the marketplace. Some of them have even receiving funding from Google (Thumbtack), while Amazon has partnered with TaskRabbit and Jeff Bezos has invested in Pro.com.
Everything points to a sector ripe for consolidation, dare I say disruption.
So how soon before Australians can expect to see the same offering? For now it appears both companies are still refining their offering at home. But what lessons can we learn from the rollout in the US? And what are the implications for local lead generation services if they do move down under?
The everything store, just add a service to your cart
Providing services is the next logical step in Amazon’s quest to build the ‘everything store’ (Jeff Bezos’ words, not mine). They are counting on you purchasing a dishwasher and then booking a service to install it on the site, all in the same transaction – just add it to your cart. What could be easier? Their Home Services offering lets US consumers search, pay for and schedule a service from 900 professional providers across 15 cities in categories that include furniture assembly, house cleaning and painting. You can also opt for pet care (dog bathing), automotive (windshield repair), tech (iPhone repair) and arts (baby photography). For your peace of mind Amazon vets every service provider for background, insurance and a licence (if applicable). And for their trouble they get a cut of 10 to 20 per cent from the service provider.
Search is everything for local services
Google’s approach is, well very Google, integrating their offering directly into search results, via an app that service providers subscribe to. A generic search for a service <plumber> in a location <San Francisco> displays their contact details and ratings, all listed at the top of a search results page. You can then make contact with the service directly – without leaving the search page. The app is part of Google’s existing AdWords Express platform and is aimed squarely at small business owners who already use AdWords or might be interested in using the platform. And like Amazon they promise to screen all providers – as well as post consumer reviews.
I want it done, like yesterday already
And while there are no indications that Google or Amazon will imminently extend their offering to Australia, there are a host of local competitors if they do. And they all are very conscious that they are catering to a consumer who is mobile, time poor and very unlikely to use their platform if it isn’t an effortless experience – call it gen DIFM (do it for me). These include ‘mobile marketplace’ Airtasker, where you can book someone to pick up your laundry (and more), and hipages.com.au, a platform dedicated to sourcing tradespeople and home service professionals.
Hipages co-founder and CEO David Vitek takes a pragmatic view of the potential threat.
“It is no surprise that Google and Amazon are directly targeting home services, it is worth an estimated $130 billion in Australia,” he says.
Vitek has invested in building a product and technical team and recently made significant investments in more scalable technology infrastructure. “A hipages user can now post a job for a plumber, on our platform and receive a response from a trusted tradesperson within minutes. This experience is what our customers expect, and you when you get it right, you get growth.” NewsCorp recently took a 25% stake in hipages, further evidence that there is growing investor interest in the home services market.
Airtasker CEO Tim Fung sees a lot to be positive about, including an evolving market that needs to cater to the needs of time-poor gen DIFM. “Home services is an absolutely massive category which is not going to look anywhere near the same in 3 years as it does today. We see platforms like Airtasker increasing the level of trust that a consumer can have when purchasing services but also a massive disruption in the types of services that a consumer can access. We see lots of traditional home service jobs like cleaning, removalists and tradespeople but also the creation of entirely new markets – like someone that can help you “wait for the Foxtel guy” or “remove a Possum from a rooftop” or “wait in line at the Apple store to get the latest the iPhone”. The creation of these entirely new service categories will not only change the way we engage with home service providers, but also the services that we can actually get access to.”
Fung’s partner (and Airtasker co-founder) Jonathan Lui recently told Business Insider, “Lucky for us they’re not coming to Australia right now…but at the same time competition spurs innovation.” He went on to say that a globally dominant player was unlikely in this space.
Until the global giants show their hand, local players will continue to enjoy first-mover advantage and tussle to dominate the rapidly evolving local services market.
Watch this space.