India Hyperlocal Market Report – 2020 : Ken Research

India Hyperlocal market has been driven by the rise in the number of startups

due to demographic diversity, vast consumer base and growing

digitization. The market has witnessed a transformation from brick and

mortar stores to mobile application. Hyperlocal market in India is majorly

a collaboration of benefits and convenience of online shopping. The

market space has witnessed a rise in the number of startups since 2014

with more than 27 deals in the year 2015 and has received a funding of

more than USD ~ million since January, 2015.

The market has witnessed an inclination within a year and has serviced more

than ~ million orders in the year 2015. India Hyperlocal market revenue

had accounted to INR ~ million by January, 2015 and has witnessed a

growth rate of ~% as compared to the year 2014. India Hyperlocal Market

is majorly defined as businesses in vicinity (nearby general merchant,

restaurant, market, mall and other service providers). The Hyperlocal

market in India majorly comprises of services such as cooked meals

delivery, ordering from restaurants, grocery delivery, handyman and home

services, offers on products and local stores, price comparison websites,

educational services and specialized booking services.

Logistics and food are the most essential part of the Hyperlocal market and

therefore account for a share of ~% and ~% in terms of the total number

of orders. This has largely been attributed to the higher migration of the

population in urban areas with the increase in employment and education

opportunities and has contributed a significant share in terms of the

number of orders received online. Hyperlocal firms in India are largely

backed by technology and have been able to connect various local

retailers with consumers in the Hyperlocal space. Delhi has witnessed

upliftment in terms of number of startups as compared to Mumbai and

Bangalore.

The market has obtained funds worth USD ~million from various venture

capitalists and investors till May, 2015. The revenue model for Hyperlocal

firms in India is commission/margin based which usually ranges around ~%

depending upon their product/service offered. Since May, 2015 firms have

obtained a total of USD ~ million in terms of PE/VC investments by means

of angel, seed and Series A round of financing. Logistics has been the

backbone of India Hyperlocal market and has made significant

contribution in the Hyperlocal market in the country. The contribution of

this seg e t to the arket re e ue i li ed to a do i a t ~% y ’ 5.

The revenue of Food and Groceries Hyperlocal market has expanded from INR

~ million and reached a figure of INR ~ million by the end of 2015. The

market has witnessed significant competition in terms of entry of various

firms such as Grofers, Pepper Tap, 1 mg, Local Oye, Roadrunnr, Shadowfax

a d others. Other ajor players i lude Foody’s, FoodA hi, S iggy a d Opinio. Hyperlocal segments in the country and therefore, has led to the

inclination in revenues from INR ~ million in January, 2015 to INR ~ million

in December, 2015 with the presence of firm such as Roadrunnr,

Shadowfax, Quickli, VDeliver and others. India Hyperlocal market has

clocked revenue worth INR ~ million and has witnessed a growth rate of

~% as compared to the year 2014.

Establishing a Hyperlocal firm largely curates through building up of an online

application / platform that allows various merchants to assemble and sell

their products at a particular location. It allows the customer to choose

from a variety of products and obtain an instant delivery service. In order to

establish a Hyperlocal company, a firm must either build a mobile

application or website that has been developed as per the preference of the

local consumers. One of the major issues faced by the firm is obtaining

assistance with merchants in terms of technology and their products. It is

necessary for the new start-ups (SMB) to figure out the useful stores that

can be associated with their application or website.

It is also essential for the firms to decide whether they want to work in

collaboration with various logistic companies or hire their own delivery

boys. In order, to enter the market the firm must decide the value of

negotiation before collaborating with the vendors and third-party

agencies. Investments are a focal part of the Hyperlocal market in the

country. The market has witnessed an augmentation in terms of the

investments obtained from various venture capitalist and angel investors.

Therefore, it is necessary for the firms in the market to generate a value

proposition that not only creates inquisitiveness in the mind of customers

but also investors.It is necessary to engage skilled and competent

employees that help in construction and invention of new products and

ideas.

Logistics has largely been a low margin business although the segment has

become the backbone of Hyperlocal market across the country. Rise in

instant-demand services of consumers has led to an increase in the need

of last-mile delivery services across the Hyperlocal space. Hyperlocal Food

market largely encompasses nearby restaurants and local chefs/ Tiffin

services in order to prepare and process the product and delivery takes

place either through third-party logistics or company owned delivery boys.

Grocery has been one of the most popular Hyperlocal segments in the

country. The market has witnessed one of the major investments in 2015

and has largely been led by Grofers and Pepper Tap. Although the segment

has least margins as compared to other segments yet the market has

witnessed significant increase in revenue due to higher volume/ bulk

purchases.

O li e pur hase of edi i es a d drugs through do tor’s pres riptio s alo g with recommendations through doctors has led to an increase in demand

of pharmacy Hyperlocal in the country. Horizontal Hyperlocal market is

majorly a mobile marketplace that provides a variety of services that

range from plumbers, electricians, pest controllers to wedding planners.

The market has largely been driven by presence of local service

professionals that comes in handy. The segment comprises of user

accessibility to services such as tutors, home-services, wellness experts

and others. Logistics has largely been a low margin business although the

segment has become the backbone of Hyperlocal market across the

country. Rise in instant-demand services of consumers has led to an

increase in the need of last-mile delivery services across the Hyperlocal

space.

Strong logistic partners allow various companies to innovate their supply

chain- in terms of GPS tracking, flexible sign-in and sign-out. Logistics acts

as a backbone to Hyperlocal industry and has a convergence with each

Hyperlocal segment in the marketplace. Therefore, it has occupied a share

of ~ in 2015 in India Hyperlocal Market. . Logistics provides a key role in

providing last mile delivery services to segments such as food and grocery.

Roadrunnr is mainly a Business to Business service. The firm does not deal

with any B2C transactions and usually has an order range of ~ per day.

Around ~ orders of the firm usually takes place from the city of Bangalore.

Grab. In which was initially known as Grab a Grub services comprises of ~

employees with a salary of around INR ~ and ~ delivery boys with a salary

of INR ~ apart from the INR 2 per km petrol allowances and travel

incentives in case of higher deliveries in a day.

These delivery boys use two- heeler’s for the purpose of deli eri g and majorly operates across cities such as Mumbai, Pune, Delhi, Ahmedabad, Gurgaon and others. The firm charges the merchant on per-order basis. The charge usually ranges around INR ~ for 4.5 km and in case the delivery exceeds 4.5km the charge would be INR ~ per order along with INR ~per km. The firm identifies Shadowfax as its key competitor and claims to be at power with its superior technology platform and operational excellence. Shadowfax is another major player in India Hyperlocal Logistics market and focuses on serving first and last mile delivery service. The firm has been serving the clients across 6 cities in the country with its proprietary technology that ensures that pickup and delivery makes the business stay last mile ahead.Logistics has although been a low margin business is likely to gain immense popularity in future.

India Hyperlocal pharmacy market has been influenced by the presence of

firms such as 1mg, PM Health and Life Care, Pluss and others. 1mg has

earned revenue worth INR ~ million in 2015 and has a major share in the

pharmacy Hyperlocal market. Online purchase of medicines and drugs

through do tor’s pres riptio s alo g ith re o e datio s through doctors has led to an increase in demand of pharmacy Hyperlocal in the

country. Online pharmacy not only offers recommendations from doctors

but also appointments and details for nearby doctors. Pharmacy has been

the third largest segment with a share of ~% followed by Logistics and

Food with a share of ~% and ~% in terms of revenue. Pharmacy has a

higher delivery time and cost (cost inclusive of the price for delivery of

medicine) and therefore has a significantly higher proportionate share in

the market in terms of revenue.

1mg a health application that had started in 2014 and is available on iOS,

Android and windows platforms has obtained more than ~ million

downloads along with a database of ~ medicines from various vendors.

Headquartered in Gurgaon the firm has an office area of ~ sqft and

comprises of ~ employees with an average basket size of INR ~ that takes

24 hours to deliver within the Delhi/ NCR region and around 48 hours in

other states of the country. The firm charges a commission of INR ~ from

each of its vendors that includes pharmacy stores and regulated

manufacturers. Delivery is free of cost and the revenue generated by the

firm majorly comprises of vendors providing a fixed commissioned amount

on the basis of type of medicine sold.

• Source: https://www.kenresearch.com/technology-and-telecom/it-and-ites/india-

hyperlocal-market-research-report/7209-105.html

• Contact:

Ken Research

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Ankur@kenresearch.com

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