Hyperlocal, an inclusive retail model which is in vogue is slowly but steadily disrupting the entire online retail landscape. The segment (hyperlocal) has seen a spate of start-ups that has gained investors attention and nabbed high-scale funding as well. Not only start-ups but even the big boys of retail such as Amazon too have entered in this space while many others have plans for the same in their pipeline.
With increasing smartphone usage across the country, consumers now have become more aware and technology dependent. They feel much comfortable in getting everything with a click of a button. This change in behaviour has fueled the need of hyperlocal services in the country. Even some of the industry pundits are of the view that if the same goes on, soon eCommerce will be replaced by hyperlocal services. The service will hold stronger base in those areas where product demand is immediate such as pharmacy, gifts, grocery, etc.
As per recent findings, Indian retail industry is worth $500-600 billion and grocery account for about 65% of the total revenue. However, grocery along with FMCG account for even less 10% of the total sale. Hyperlocal segment is still at a very nascent stage in India, therefore, are still at a stage where they have to prove their business models as it is a habit change experience for the consumers.
Some hyperlocal start-ups like Grofers, Zopper etc. have hit the market with a storm while others like LocalOye, UrbanClap, UrbanPro, PepperTap and LocalBanya are on the verge of establishment. Retailer Media approached all these five emerging hyperlocal players to understand the ongoing revolution and their market position amongst the peer groups. Here’s what they shared:
On demand hyperlocal startup LocalOye which has recently nabbed funding from Tiger Global and Lightspeed Ventures offers more than 30 services to consumers across ten different categories such as education, event planning, health and fitness etc. The startup is now focusing more on building up their categories instead of expanding to more cities. Commenting on the same, Aditya Rao, Founder, LocalOye said “When it comes to a broader hyper local play there are food, groceries and other things involved. There are two things happening: E-commerce has done right in that they have completely established themselves, they have completely cracked the market and now they are going after consolidation.”
Backed by SAIF Partners, Accel Partners and Snapdeal founders, the startup has created a niche in the service providing hyperlocal segment. It claims to have more than 60,000 of its app downloads within a span of just two months. When asked about the journey so far, Varun Khaitan, Co-Founder, UrbanClap said “The journey has been exciting, and of course, not easy at all. The idea was, is, and always will be, to control the market place of service and make it very simple for a person to be able to hire a service provider to fulfill their service needs. We are currently driving 2,500 requests on a daily basis which is the coming months will easily take to 5,000.”
UrbanPro, which started with just one category education, has now expanded its footprints in fitness, health, event services, hobby classes and many more. The startup helps consumers make the right hiring decision by quickly connecting them with matching service professionals in their locality or online, across different range of categories. When asked about 5 mantras for the success of a hyperlocal marketplace, Rakesh Kalra, CEO, UrbanPro said, “Hyperlocal services as a segment today is very dynamic. While new entrants crowd the market every day, we believe that the stickiness for a brand should be derived from the following: Knowledge of target market, user friendly marketplace, easy accessibility, quality service and diversity of products or services.”
When we talk about the grocery market, hyperlocal services, in short time, has chalked out its route in no time. Peppertap, a road runner in grocery landscape has marked an exceptional growth with a few months of its inception. Started with 10 orders a day, the hyperlocal grocery service provider now bags more than 1,000 orders daily. When asked about the reason for stepping into hyperlocal grocery, Navneet Singh, Co-Founder, Peppertap said “We understand that there is a need of quick and convenient grocery delivery. Groceries are shopped for in every household almost every week and a visit to the local supermarket comes with a lot of pain points. Like waiting in long billing queues, driving and parking vehicles etc. Hyperlocal is going to be the next big shift in the eCommerce space and grocery is a hot category that can grab a major chunk of this prevalent market. On-demand fulfillment is in trend thanks to the proliferation of smartphone technology and escalating use of mobile applications.”
Online shopping has shown good returns to these hyperlocal players that it would have been from the physical stores. When asked to comment on the eCommerce perspective, Rashi Chaudhary, Co-Founder & COO, LocalBanya.com said “The entire purpose for a hyperlocal grocery service provider is to provide families with the convenience of shopping online and avoid the headaches associated with regular trips to a crowded supermarket. First and foremost it adds value to people’s lives. E-Commerce has really taken off in India and your typical consumer is very comfortable transacting online. It was only natural that shopping for groceries and household items would eventually start moving online.”
Hyperlocal which was once not an in-favor category with Indian etailers, is gunning for an exponential growth with startups, existing retail giants and even investors betting big on the model. Pulling a neighborhood mom-and-pop store into a technology driven delivery model or partnering with local professionals for building a technology driven service model , are the two successful modes in this space as off now. The industry is no doubt hooting up in the country. Though home-grown problems are being solved by local solution providers in a very unique and digitized manner but the coming years will decide on how sustainable this model is going to be. Retail is all about experimenting; hope this model turns out to be another blast like e and m commerce.