HyperLocal Delivery Business

What comes to your mind when someone talks about ordering FOOD!

Right!! Its Swiggy or Zomato at first, and then you think about other food delivery apps. Swiggy was started in 2014 in Koramangala, Bengaluru and Zomato started its operations in the year 2008 in Delhi. Both the startups started with slightly different ideas. Swiggy founders started with the idea to create a Hyperlocal food delivery app whereas, Zomato started with the idea to enable digital access to thousands of restaurant menus.

Due to the rise in digitization in India, growing Startup culture, increasing interest in personalization, and urbanization, hyperlocal market is expected to reach more than $3 bn by 2020.

Hyperlocal delivery

First, let us understand what is hyperlocal delivery

Basically, it means delivering stuff from one place to another within the neighborhood within a city. The items which are required to be delivered within a very short period of time (generally called perishable goods) like Food, grocery, vegetables etc. are delivered within the city using hyperlocal delivery business model. The time frame can be as short as 30 minutes. You can buy stuff from your nearby store using an app or ordering over call, and the products will be delivered to your doorsteps in a while, with the help of a hyperlocal delivery model. According to Tracxn, there are more than 1150 hyperlocal delivery companies across the world.

Examples of Business Based on Hyperlocal delivery:

Swiggy, Zomato, Dunzo, Urbanclap, BigBasket, MilkBasket, Grofers, Netmeds

How does it work

With the elements of a business model canvas, we will show you how the hyperlocal delivery business is run.

Value Proposition

For Consumer

  • Safely Delivering the products to your doorstep within a stipulated time
  • The delivery time will differ as per the product category
  • For products like food, it can be as low as 30 minutes and for some hardware products, it may be a few hours
  • Reducing the risk of damaging the products while taking them home by themselves by offering guaranties
  • Time-Saving and convenience of Shopping from home

For Sellers

  • Cost Saving: Not requiring shops to be set up, all orders can be taken online and served through the hyperlocal delivery platform
  • Visibility: Available to more consumers in the market hence more orders
  • Risk reduction: Many hyperlocal delivery businesses offer customer service and grievance resolution functions

Channels used for Communication & Executing Business

Nowadays hyperlocal delivery business are working using mobile apps. For example: Dunzo, Netmeds, Amazon Go(delivery), Swiggy etc. They offer their service to Consumer on one app and offer business apps to the sellers/businesses. There are web channels as well for communication.

The old way of communication in the hyperlocal delivery model has been phone calls. Remember the times when you went to buy a Couch in a furniture shop and the shop owner gives you a phone number of a delivery guy.

Revenue Model

Hyperlocal delivery businesses earn on the commissions per order from the Sellers. They may also monetize by taking the transaction fees and delivery charges straight away.

Generally, the delivery charges are included in the price of the products which are listed on the hyperlocal delivery platforms. Some platforms like Swiggy and Zomato will charge the customers for delivery additionally.

Key Resources

  • Predominantly these businesses require manpower and vehicles to deliver products; some require specialized vessels for particular product category
  • Platform for ordering, order tracking, order maintaining, delivery scheduling, delivery optimization and other tasks

Opportunities in the HyperLocal Space

  • In developing economies like India, most of the Business are offline. People go to nearby Kirana shops for FMCG. On boarding these Kirana stores is hugh opportunity
  • Indians are very particular when it comes to buying vegetable, touch and feel is of essence in when we are purchasing vegetable. AI and Machine learning should be used to identify the freshness of the products using the product images.
  • Implementation of block-chain in the supply chain will definitely help in increasing trust when it comes to food and food related products. (not restricted to food only)

That is all in this mini article that we wanted to share with you. Hope you have a clear understanding of what HyperLocal delivery Businesses are. We would love to know your thoughts about the opportunities in the hyperlocal space in the comments below.

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