Sunday 10 January 2016

Is Hyperlocal Business Model Sustainable?

There are different e-commerce models are in run now. Among them, hyperlocal model is widely adopted by different e-commerce, like online grocery storein Gurgaon. This is cost beneficial and helps e-commerce deliver ordered goods fast. This piece of writing puts more light on hyperlocal delivery. Have a read through.

E-commerce is old news. Hyperlocal is hot new buzzword in retail. From grocery delivery, like online grocery store in Gurgaon does, to home, office and personal care services – there is already a wide range of services on offer. Hyperlocal services are inventory based and largely an urban India phenomena. Hyperlocal services are driven by locality or communities. When moving into a city, people would like to stabilize quickly – here, hyperlocal services step in.

As Indian retail industry is worth $500-600 billion, of this grocery items account for about 67% of the revenue. In FMCG (fast moving consume goods) and grocery, modern retail formats account for less than 10% of total sale. E-commerce or hyperlocals are tiny part of the pie yet. Most companies are at a stage where they have to prove their businesses and also have to change customer behavior.

While on demand grocery delivery has immense potential in this space, other potential categories include delivery services - like delivery boys, peons, specialized laundry services, electricians and plumbers – price comparisons and food ordering apps, and more.

An aggregation model is less capital intensive than inventory-led one. It is easier to scale up such a model. New generation of hyperlocal startup is coupling aggregation with logistics/delivery and controlling the last mile.

Take Zopper – a product based hyperlocal – which started as electronics price comparison website. Now, it is a platform for purchasing products from offline stores. It counts on faster delivery tying up with local shops near buyers. The company says that it needs to bring more merchants on board, and for this, they have to download the app and list their products. Its margin vary from 2-8%.

Further, hyperlocal services have as higher margins as 20% opposed to product based models which earn 2-10% margins. Even non hyperlocal e-commerce operates on 3-7% margins, depends on category.

2 comments:

  1. Nowadays people are much more alert about how to save money. With online grocery shopping, you can reduce your grocery expenses and save your precious time. You need not to go to markets, stand in queue anymore, You can simply sit at your home and shop online.and for that many sites are available like big basket Needs the supermarket, spicenpulsesgurgaon. and many more

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