Why is Hyperlocal business better than eCommerce explained


IIn the wake of the current pandemic a lot of entrepreneurs are finding it hard to believe that eCommerce can sustain. This has made them question the credibility of on-demand services.

But the services being fetched from the mobile has only increased. If it’s not the eCommerce that’s helping the people fulfill their needs then who’s it? The world is going hyperlocal.

Why is Hyperlocal business model better than eCommerce? This article will let you know about the hyperlocal business model in detail.

What is a Hyperlocal business?

Hyperlocal businesses are the ones where you build a local ecosystem that enables customers to buy anything from their neighborhood stores.

A Hyperlocal marketplace forms a local ecosystem from where people can access the services of the stores near them, order items from these online stores with the help of their smartphone).

What does Hyperlocal mean?

The term hyperlocal was coined in 1991 and since then it has been through many phases, out of which the most recent is GPS based services and mobile apps.

Hyperlocal basically means an on-demand marketplace that is based on or limited to a particular geography. Its only intention is to cater to the needs and demands of a particular geographical area.

How is Hyperlocal business different from eCommerce?

Hyperlocal businesses are basically the businesses that are spread around your geographical area such as your local service providers, Kirana stores, restaurants, etc. and are available to you via apps or common platforms, whose services you can avail in no time. 

Hyperlocal businesses solve the problem of any burning demand from the nearest available supply in the most optimized manner.

eCommerce on the other hand works on a national or a global level with large operations on an even larger scale, trying to fulfill requirements that are not too urgent. The success of an eCommerce business lies in making the consumers happy with cheaper and yet better options who are fine with waiting for a day or two or more.

Who are the biggest players of Hyperlocal businesses around the globe?

Here’s a list of biggest Hyperlocal businesses:

Food and Grocery Ordering  Services

  1. Doordash
  2. FoodPanda
  3. Zomato
  4. Dunzo

Home Healthcare Services

  1. Doctor on Demand
  2. Healthtap
  3. Pillpack

Handyman Services

  1. Taskbob
  2. Handy
  3. UrbanClap
  4. Taskrabbit

Personal Care Services

  1. Get Home Salon
  2. AtHomeDiva
  3. Paw Partner

How does Hyperlocal delivery model work

Decide what you need to deliver

To make a hyperlocal delivery model possible, the first thing you need to do is to decide on what the products or services you intend to deliver. 

You can choose from a wide range of options like delivering daily basic needs products like grocery and dairy products, restaurant food, vegetables, and grocery items. 

You will have to approach all your local businesses and form a community when you are planning for a hyperlocal delivery platform.

Knowing the target audience who need your services

Knowing your target audience forms the next basic step after you finalize your area for the hyperlocal business model. 

This is where market research helps. There are various factors that might contribute to or adversely affect your hyperlocal eCommerce such as the gender, age group, profession involved in, timing, etc. 

A good and deep understanding of your target audience will not only help you in shaping your business model and platform but also provide you an upper hand in gaining their trust as well. 

Finding local delivery partners to collaborate with

After figuring out what you need to deliver and who will be your targeted audience, the next thing is to find the right kind of delivery partners who share the same vision as that of yours to collaborate with.

You can build your business without an immediate partnership with them or only go about as an aggregator of nearby supermarkets.

In fact, you can initially ask these local businesses to build partnerships with delivery men or companies and ask their delivery men to deliver goods to the said locations.

Define your income model

You can collaborate with nearby stores who will pay you a commission each time you pick their stuff. 

This may expect you to limit to specific shippers in a specific area and, in the long run, contain your operations.

You can also charge a commission based on a percentage for every order sold. This can be applied if you let the businesses handle their own delivery through self-appointed delivery men.

You can also charge clients a comfort expense over the delivery charges. In case the order is in bulk, clients anticipate that you will give some discount in the delivery charge, and in situations like these, comfort expense will help acquire you a few bucks to make a good profit margin.

Building a hyperlocal mobile application

It is important that you build your own hyperlocal application. 

Do not restrict yourself to just one app. You will need to bifurcate roles like drivers, shippers, and clients for this situation and create individual apps for each of them. 

This will help you from uncomplicating things and good integration between your mobile apps will get the job done in an unclustered manner. It also forms different communities for each of them where your effort to improve things will feel more personal. Hence, individual hyperlocal mobile applications become quite important.

Hyperlocal Business Ideas for 2020

This here is a well-researched list of trending and budget-friendly hyperlocal business ideas that you must know about in 2020.

Food Ordering Services

Although, the sudden surge in pandemic cases and its nature had put a hold on the industry in the beginning, people are now vouching for food from restaurants again. This might be because they would have understood that only by taking the necessary precautions can we come out of this dire pandemic situation.

Since this is a huge niche, you already have a lot of players to compete with and it is also very difficult to sustain as well as get the restaurants and grocery stores on board. 

food  delivery market potential graph

But, the positive side of hyperlocal apps is that unlike the standard eCommerce apps, users/customers do not have a sense of brand loyalty since they personally know and trust the places/businesses they order from and not just your app. 

Your app’s only purpose is to connect them to their necessary businesses/shops so that they can order from those shops online. The only two things that matter are how fast you are and how much will they be able to save from your app compared to other hyperlocal mobile applications

This is why even though the competition is cut-throat, the startups have a chance at surviving.

Suggested read: How and why build a food delivery app for restaurants?

Handyman Services

Cleaning services, Plumbers, Electricians, Gardeners, etc are the recurring requirements of people that they cannot do without or put through. 

Having a hyperlocal mobile application can help them find the service providers they need, book appointments with them as per the requirement and the time that best suits them.

Drawing investors, rise in demand, price effectiveness, increase in working population are some of the factors leading the growth of the Hyperlocal businesses that provide professional home services and handyman services

Home Healthcare Services

Home healthcare is an umbrella term used for services like senior care services, baby care services, caregiving services,  home nurses, special needs care, etc. 

With the increase in the risk and rate of stays in hospitals, home healthcare services are really coming handy.

Developed countries are already utilizing this to the fullest, the home healthcare services hyperlocal mobile applications have started getting attention in the developing and rising economies as well. 

The home healthcare industry is expected to reach US$ 340 Billion by 2024. This promising estimate should indeed act as a motivation for you to get into the business before the newfound markets have been exhausted by the existing players.

Suggested read: Hyperlocal: The future of online pharmacy business model

Personal Care Services

The pandemic has put a halt on all those places that provide us with personal care services. 

It is during this pandemic that we need more self-care and self-love than during any other time. But who would want to face all the traffic and the driving and risk their lives during the pandemic, to go to the Salon, Masseuse, Spa or Beauty Parlour!

Hyperlocal mobile applications provide the same services at the comfort of your own home. 

But the question that you would be interested in is how does personal care services hyperlocal model ensure profitability to the entrepreneur launching the business?

  • Your customers are saving the hassle of traveling to the salon in the middle of a pandemic. Even if the cure is found, why would they want to leave the comfort of their home?
  • Saving them from having to call the services to book an appointment and then having to manage their schedule in order to stick to the said time.
  • Service quality is basically the same, customers would not mind paying a little more if you are pampering them with so much comfort.

Suggested reads: Everything you need to know about on-demand apps and services

Why the demand for hyperlocal eCommerce will continue post-COVID pandemic

The pandemic has changed the way we live, work, shop, and even what we shop! 

As most of us are confined indoors, online shopping of essentials has only skyrocketed. This has also led to an increase in the demand for fast and safe home deliveries tremendously. I mean, why wouldn’t they! Everyone wants to avoid crowded supermarkets and unsanitized restaurants and so they keep opting for contactless shopping alternatives.

Initially, with lockdown being imposed in a lot of countries across the globe, a lot of big-scale eCommerce companies have been struggling to fulfill demands, local retailers stepped up to deliver groceries, vegetables and fruits, fish and meat, and other household items to people’s doorsteps during the lockdown. 

In these circumstances, local supermarkets and grocery stores were the most reliable source of essentials for all the needed items.

This is why Hyperlocal mobile applications are reportedly making huge profits across the globe. 

Especially, in a developing country like India, only around 10% of the 700+ million internet users use online marketplaces. The primary reason for this level of disinterest in eCommerce is due to lack of trust and hence, becomes an excellent launchpad for hyperlocal eCommerce mobile applications that encourage purchases from known stores.

Also, features like Geolocation or Geo-tagging provided by Google and other giants and contextual targeting tools have effectively driven the eCommerce sector into being pro hyperlocal. 

There are various factors responsible for the speedy growth of the hyperlocal delivery business. The primary reason being speed, safety, convenience, and real-time visibility. It also allows retailers to step up to meet the growing demands of the public, by integrating bricks and clicks into a profitable venture. In short, it is a win-win for both retailers and consumers.

Hyperlocal business platforms will continue to use artificial intelligence and machine learning capabilities in the most efficient way by focusing on areas like route planning, order consolidation, estimating time slots, and overall servicing costs. 

With the use of AI and ML, existing hyperlocal mobile applications have started targeting audiences based on their demographic and psychographic segmentation for rapid growth in this sector in the future.

Undoubtedly, hyperlocal eCommerce mobile applications are about to bring the next evolution in business and rural commerce in the coming time. Statistics say that the rural eCommerce sector is heading towards being a $10-$12 billion worth market in the coming years.

Conclusion

The reason why the hyperlocal business model needs to be pursued is that it is a little less explored in the economically growing countries compared to the rich and developed countries. 

But the customers, retailers, entrepreneurs, and the economy – all of them are more than happy with using the hyperlocal mobile applications that exist in the market right now. If you tap into the market with the right amount of research and a good to go mobile application then you can expect to be quite successful in such businesses in the near future!

Working with an experienced mobile app development company like Archisys, will not only help you in creating a mobile application but also help you in evolving the application as well as your business through smart strategies and obtain data. 

Archisys as one of India’s leading mobile app development company has been specialized in eCommerce and hyperlocal business development since it has experienced and certified DevOps experts as well.

You can always find out good development teams for your hyperlocal business application from various sources. But if you wish to consult with us, you have two sessions of consultation absolutely for free!


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