“It’s not business…its personal”, said India’s largest online fashion retailer Myntra, when they decided to shutdown their Myntra.com website services in May to run their business solely through their Myntra app. This move was based upon the rapid expansion of the smartphone market in India and the countrywide growing mobile internet user base. According to a report published by ‘We Are Social’, a global social media agency the share of internet traffic is about 27 percent on laptops and desktops, 72 percent on mobile phones and only 1 percent on tablets. India is now the second largest mobile phone market with more than 930 million customers. With such a market potential offered by smartphones, ecommerce giants have already launched their mobile applications and they have been pushing offers exclusively on their apps with the aim of getting consumers on to the platform.
Another reason for an increase in mobile commerce is smartphone penetration in rural markets. Online retailers are taking advantage of this increasing penetration to tap market opportunities in Tier II and Tier III cities. Thus mobile commerce is likely to overtake ecommerce in the upcoming few years.
‘Hyperlocal’ is perhaps the new buzzword in the ecommerce industry and has managed to rattle ecommerce giants. Hyperlocal is the next wave in the mobile commerce revolution. An increase in the number of mobile-first start-ups in this space and growing interest of investors shows the amount of potential of hyperlocal marketplaces. This has made possible the delivery of everything from groceries. medicines, laundry, food and much more, directly from nearby stores, along with faster delivery and less shipping cost. Consumers are becoming more aware and feel comfortable getting everything with just the click of a button or touch of a finger.
Hyperlocal commerce essentially consists of firms that cash in on technology and are able to connect the local retailers with the consumers in a particular area. These firms have advantages like lower logistics costs, negligible inventory costs and less delivery lead time. Another benefit hyperlocal firms enjoy is that of content or offering customisation based upon the demographics of their target market.
Hyperlocal startup firms are attracting investors interests increasingly because of the huge potential that exists in this space. Since the beginning of 2015, hyperlocal startup firms like PepperTap, ZopNow, Jiffstore, Grofers, Woolpr and Zopper have raised big money.
Challenges in the hyperlocal marketplace
Hyperlocal marketplaces have challenges like any other business model. In terms of competition and their vulnerability in this space, the ecommerce giants are trying to setup their own hyperlocal platforms. Global ecommerce giant Amazon has launched its express delivery platform ‘KiranaNow’ an app-only platform to cater to hyperlocal deliveries. The project was launched as a pilot, but this clearly is an indication of rising competition in the hyperlocal space. Having an efficient and reliable network of local partners and delivery capability is essential to provide prompt services to consumers with least cost and least lead time. Investing in technology, data and process can make the services more successful. In order to outsmart the competition, the firms need to be careful about the economies of scale and profitability. With the increasing scope of hyperlocal marketplaces, there’s the potential for mergers and takeovers since the number of players emerging in this space is immense. Finding an appropriate and suitable niche in the market is the key to sustainability. Thus the one who can cash in on the 4 R’s of Responsiveness, Reliability, Resilience and Relationship can be the one who can influence and make an image in the minds of the consumer.
Thus with businesses focusing their energies solely in the area of apps, the consumers can also expect improvement in service quality. Initially when hyperlocal delivery concept was taking shape, few consumers were aware and were not ready to accept that someone can deliver goods and services from their local areas directly to their doorsteps. But with increased use of smartphones for convenience and consumers getting pro-technology, mobile commerce and hyperlocal can surely be the next wave for digital India.
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