Introduction to the Hyperlocal Marketplace Model
The clarion call of 'Vocal for Local' may have been popularized in India in the context of the pandemic, but business owners have been establishing their hyperlocal market systems for quite a while now. Hyperlocal marketplaces refer to a very localized form of business model wherein businesses cater to the needs of customers in a particular geographical area. Since the focus of the enterprise is centered on the creation of a ‘micro-marketplace’, hyperlocal models are able to meet specific demands of consumers through a local network of suppliers and delivery systems.
The rise of social media and the technological advancements in navigation systems like GPS occupy a central role in the success of the hyperlocal marketplace model. Businesses have the liberty of creating their own e-commerce websites with highly localized target regions. To understand what it is about hyperlocal marketplaces that is so alluring, let's take a better look at the hyperlocal industry and its relevance in the modern marketplace.
Conventional e-commerce vs. Hyperlocal market model
E-commerce brands are characterized by sizeable high-end operations with dozens of warehouses, supply chains, and longer delivery estimates. The allure of the hyperlocal lies in its intrinsic ability to fulfill the market demand with the nearest possible supply option as fast as possible, thus eliminating the need to maintain warehouses. Nowadays, it is not uncommon to see businesses that began on a hyperlocal scale operate nationally. The feat that these brands have managed to achieve is seamlessly integrating different market zones into a single operation while maintaining their autonomy.
Relevance of hyperlocal marketplaces in India
With rapid developments to make buying a memorable experience for the customers, the marketplace is being automated in a whirlwind. Contactless purchases and delivery have become the norm. In such an atmosphere, the hyperlocal strategy acts as a necessary booster for businesses to survive.
1) Reduced delivery time
The hyperlocal delivery model has solved the long-standing problem of delivering items required on an urgent basis by establishing a complex network of local suppliers and delivery executives. People can order anything from food and groceries to medicines and receive their orders within the hour, with some deliveries reaching the consumer in less than 20 minutes!
2) Cost-effective
Since the entire operation is locally managed, businesses are no longer required to maintain large warehouses for storage. In addition, the shipping costs are significantly lower when compared to conventional e-commerce shipping, lowering the cost for the consumer as well. E-commerce returns, too, are easier to manage.
3) Maximized customer satisfaction
Lower commodity costs coupled with faster deliveries and a transparent delivery process pave the way for happy customers. Buyers can contact the suppliers or delivery persons directly in case of any queries.
4) Customer-tailored business strategy
Since hyperlocal brands focus on a particular geographical area, they can analyze the specific market demands of the consumers in the locality and formulate a strategy that furthers their brand goals. They can make changes to their policies and introduce region-specific projects to cater to the needs of their customers.
5) The COVID phenomenon
As people adapted to the new normal in the aftermath of the pandemic, retail in India moved away from the physical spaces of markets and malls to the virtual arenas of e-commerce sites. Buyers now turn to hyperlocal channels to fulfill their demands for essential commodities such as food, medicines, and hygiene products. Companies, too, collaborate with their hyperlocal counterparts to provide their customer base with a seamless and efficient buying experience from the comfort of their homes.
Hyperlocal delivery startups in India
These are some of the popular delivery platforms in India that have optimized the hyperlocal strategy.
1) Swiggy
Tracing its roots back to a small office in Bengaluru in July 2014, Swiggy is a food delivery platform extending its services pan-India. One of the fastest-growing hyperlocal brands in the country, Swiggy connected with local restaurants and food joints and established a massive supply chain offering on-demand food and grocery delivery to its customers.
2) Borzo
Earlier known as Wefast, Borzo is one of the leading same-day intra-city delivery courier services operating in 14 major cities of India. Borzo deliveries are not only safe and secure but are completed at an incredible pace. While inter-city deliveries via other slow courier services take anywhere between 5 to 15 business days, Borzo completes its intercity deliveries within 1-2 days, making it one of the fastest courier services in the country.
3) Shadowfax
Another Bengaluru-based delivery service, Shadowfax, leads the economy when it comes to the outsourcing of last-mile delivery services. Shadowfax provides businesses with the answers to all their delivery needs on the same platform with the help of technology to maintain the demand and supply equilibrium in the hyperlocal marketplace.
4) PharmEasy
PharmEasy is not only an e-commerce website but one of India’s widely frequented platforms for pharmaceuticals. The platform’s growth increased exponentially during the pandemic: with medicines and healthcare products in high demand, PharmEasy’s convenient interface and trouble-free delivery made it a popular alternative for buyers.
5) Blinkit
Blinkit introduced the concept of an online supermarket and made ordering groceries, like fruits and vegetables, accessible to the masses from the comfort of their homes. The buyers, too, rest assured that their order would arrive in the blink of an eye.
6) Dunzo
Dealing in the same arena as Blinkit, Dunzo offers 19-minute delivery services for all grocery and essential needs. While Blinkit maintains its own warehouses, Dunzo acts as a mere middleman between the buyer and the delivery partner who makes the purchases and delivers them all in the same timeframe.
Conclusion
The rapid digitization of the country in the wake of the pandemic has provided the perfect opportunity for hyperlocal business models to germinate. It doesn't just offer a luxurious purchasing experience to the buyers but also allows a space for local businesses to thrive in the virtual space. While certain challenges come associated with implementing a hyperlocal strategy, such as the issue of maintaining inventory, the benefits outweigh the costs. It's only logical; that companies turn to hyperlocal actors to survive in an environment marked by e-retailing and technological advances in the near future.
FAQs
1) How does the hyperlocal marketplace work?
The hyperlocal market works exactly like e-commerce purchases. Buyers place their orders on a digital platform which are then processed by the system. However, instead of the brand dispatching the order, the product requests are sent to local vendors, who accept the order and deliver them in the given timeframe.
2) How do you model your business around a hyperlocal system?
To have a successful venture in the virtual marketplace, you must first decide what you want to deliver, who you want to deliver it to, and how you plan to deliver it. These three factors, the product, the locality, and the mode of delivery is what forms the crux of launching a hyperlocal strategy. After making these decisions, you can create a user-friendly platform for people to place such orders, or, if you're a merchant, you can partner up with such platforms to provide your services.
3) Why is a hyperlocal strategy important for physical stores?
Going hyperlocal is not a threat to the conventional marketplace but a means to alleviate it. When buyers have a satisfying experience online, they are much more likely to frequent the store in person. The increased usage of the ‘near-me’ feature expands profits and makes smaller businesses discoverable to the larger public.