Indian retail landscape has undergone a massive disruption over the course of past 5 years. It all started in 2013 with the rise of eCommerce which further paved way for the advent of mCommerce in 2014. Then came 2015, which was surely the year of the hyperlocal marketplace. The industry witnessed a whooping splurge in terms of transactional volume and massive consumer adoption. Betting on the reflection, the hyperlocal market successfully managed to lure investor interest thus making them inject millions and millions in this space. Hyperlocal alone grabbed a total funding of around $270 million within 6 months, leaving behind many eCommerce players.
Betting on the increasing internet penetration and smartphone usage, hyperlocal industry embarked its persistence in almost no time. eCommerce was one big reason why hyperlocal services were widely accepted by the consumers. eCommerce industry broke the stereotype shopping methodologies and made people smartphone savvy for maximum of their shopping needs. This was enough for the industry entrants to build that moment and hype the hyperlocal fire in the market.
This paradigm shift happening in the digitial space has surely made consumers trust the online medium as a channel for transactions. As per a recent Assocham-PwC report, Indian consumers spend about $22 billion on eCommerce transaction and this is going to reach as high as $86 billion in the coming 3 years. Tapping upon the above mentioned facts, on-demand grocery startups have surely created the maximum buzz in the past few years. Recalling the early days, startups like Grofers, BigBasket, Peppertap and 2 others, secured around $120 million last year. Out of nearly 50 of such on-demand startups that set forth the on-demand notion, 15 more than managed to raise heavy funding. But what happened afterwards is something to really ponder about.
The demise tail...
2015 can be crowned as ‘THE’ year for hyperlocal space. The industry saw rise, dominance and epic fall in the same year. Despite the large market size, consumer preference and huge injection of funds, what led to such a catastrophic downfall? More importantly how did the industry managed to keep things moving and how is the scenario today?
No doubt, late 2015 was dreadful for many hyperlocal startup as they couldn’t manage to executive their blueprint and some failed miserably soon after a little expansion. Remember the sudden boom of hyperlocal grocery startup Grofers? From raising millions of dollars to shutting down operation in 9 major cities to finally shifting headquarters from Gurgaon to Singapore, the company saw an ebb and flow in a span of about 12 months. The flux shows everything that is wrong with India’s young hyperlocal industry. Not just Grofers but, many such hyperlocal biggies had similar tail to share. Peppertap, an online grocery service provider, known for its hyper funding, too collapsed soon after huge funding. The Gurgaon-based startup felt short on technology, expansion and unfeasible discounting.
Hyperlocal goes LOCAL...
Looking at the tantrums within, hyperlocal startups are now coming up with a totally different approach. Leaving behind their earlier outline of expanding the base into every nook and corner of the society, startups are now focusing more on strengthening their grip around its vicinity. Rather than a Pan-India approach, these new on-demand grocery startups like Allsupermart, GrocNow, SabzitoHome and others are been seen focusing on local areas. Though these are new names in the industry but, looking at their slow yet steady approach and growth, it seems like hyperlocal industry in India is becoming real ‘local’ for a stagnant growth. Grocery is one of those few verticals where eCommerce has not really made huge inroads as it’s not so easy replace traditional purchasing models. With hyperlocal industry still paving way to get stable, digging a deep foot around vicinity is the way forward. However, the really battle begins when things settle down but, it will interesting to see how these new-age startups will establish the brand proposition as this consumer-first business now is now putting consumers at the centre of their solution.