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 segment to the market revenue inclined to a dominant ~% by ’2015.

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 and others. Other major players include Foody’s, FoodAbhi, Swiggy and 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.

Online purchase of medicines and drugs through doctor’s prescriptions along 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-wheeler’s for the purpose of delivering 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 doctor’s prescriptions along with recommendations 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.

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