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Overview of How Hyperlocal Delivery Startups & Business Evolved
Hyperlocal delivery is one of the most rapidly expanding delivery services, quickly making its way through the eCommerce sector of numerous different major industries. The word hyperlocal essentially signifies a specified small geographical area. In the case of delivery services, this usually (but not always) refers to a specific city or a specific region that is serviceable.
For most e-commerce businesses, hyperlocal delivery works make use of on-ground stores for each business in that region. With the stock already available in that area in said stores, deliveries can be completed within hourly time frames.
Many businesses rely on their own on-ground workforce or on a hyperlocal delivery aggregator to provide hyperlocal delivery services. Some also make use of logistics partners and shipping companies that are equipped to provide hyperlocal delivery in certain locations. We’ll be taking a look at the journey travelled by hyperlocal delivery in India and how it has continued to grow, even during these recent trying times. But first, let's get a clearer picture of what hyperlocal delivery is and how it helps an e-commerce business.
What is Hyperlocal Delivery and How does it Help Ecommerce Companies?
Hyperlocal delivery is a specialised shipping service that delivers orders to customers by sourcing items directly from a local store in the customer's vicinity. In hyperlocal delivery, eCommerce businesses work together with local vendors so that every local store works like a warehouse for the Ecommerce company.
By delivering orders from the nearest local vendor of the customer, online businesses can reach their customers much faster than if they were to deliver orders from their central hub. Hyperlocal delivery connects online stores and customers via local merchants and enhances customer experience greatly.
Ideally, hyperlocal delivery should not take more than 2 hours. However, since hyperlocal delivery is a fairly new concept in India and worldwide, a lot of courier companies still don't provide hyperlocal deliveries. Therefore, orders can take longer to reach customers, especially in Tier II and Tier III cities, even when they are delivered hyper-locally.
The differentiating factor here is the place where the order comes from. Hyperlocal delivery in the Covid and Post-Covid era has given local merchants and Kirana stores a fresh lease of life. As the Ecommerce space evolves and faster deliveries become the norm, hyperlocal deliveries too will become more popular among consumers.
The Evolution of Hyperlocal Delivery Business and Startups in India
There were numerous companies providing minimal hyperlocal delivery services in the late 2000s, like FoodPanda and Zomato. The success of these ventures were short-lived, likely due to the lack of funding and technology needed to efficiently track and deliver items in a timely manner.
However, the goal of hyperlocal delivery was well-established at this point. To connect sellers and businesses within any given region with all possible and potential customers in reachable distance. So in 2014, when Swiggy hit the market, customers in cities across the country were waiting with open arms to receive these new faster delivery services.
That’s essentially how the start of the hyperlocal delivery business and market looked; filled with a series of food-delivery agents zipping across major metro cities feeding hungry foodies. But with the growth of both eCommerce logistics in India, the possibilities seemed limitless. And limitless they were.
More and more businesses began to enter the hyperlocal market, financially backed by major conglomerates. Numerous older hyperlocal delivery services that failed to pick up in their initial days were quickly scooped up by the new hyperlocal giants, like Pickingo, which was taken over by Shadowfax and Runnr by Zomato.
Within a few years post-Swiggy’s rise to prominence, businesses like Dunzo began to take over. They provide not only hyperlocal delivery services but also other hyperlocal services like errand-running and pick-up and drops.
Ecommerce businesses jumped in on the hyperlocal game, utilising both external and internal resources to deliver orders to a larger customer base located within a shorter surface area. Making use of both warehousing options as well as their own stores, more industries have been able to enter the hyperlocal sphere.
List of Industries Using Hyperlocal Delivery Business
From solely food delivery services, hyperlocal delivery has expanded to accommodate the following industries. As lockdowns and curfews pushed people in their homes, Ecommerce companies working in the grocery, health and other necessary goods segment stepped up to meet consumer needs. Let's take a look at the industries that introduced hyperlocal delivery services in the Covid-era.
1. Pharmaceuticals
Given the urgent nature of medical needs, it’s no surprise that the pharmaceutical industry would want in on the hyperlocal market. With delivery services like Dunzo, and pharmaceutical aggregators like 1mg, PharmEasy, etc., hyperlocal delivery of medicines and medical supplies has become an important part of the market. The pandemic led to huge investments in the health and wellbeing industry. Hyperlocal delivery of medicines has been beneficial and often life-saving during these times.
2. Grocery
Household supplies are constantly in demand. While they may not be as urgent as medical needs, nearly every home has faced the struggle of being one ingredient short while prepping for the day’s meals. Grofers, BigBasket, Dunzo and Swiggy all now provide within-the-hour and same-day delivery of groceries.
3. Electronics
Because electronics are so fragile, they are constantly at risk during long journeys. Cross-border journeys especially can result in shipments of electronics getting stuck and damaged. FlipKart, PayTM Mall and Zapper are all leading suppliers of electronics available through hyperlocal delivery. Amazon also brings electronics to customers' doorstep with hyperlocal delivery.
4. Logistics
If it’s related to delivery services, the eCommerce logistics industry absolutely has to be involved. Logistics companies in India like Pidge, Blowhorn, Shadowfax and many others have expanded their services to include hyperlocal delivery. These services can be utilized by both large eCommerce companies that maintain their own stores in certain localities & by smaller ones that rely on warehousing services.
How Hyperlocal Delivery Startups Evolved During the Pandemic
The COVID-19 Pandemic brought with it a slew of challenges that impacted everyone. Ecommerce businesses took a major hit and logistics industries had to slow their roll. With stores shut, customers all across the country were left without any purchase options. Stores were only able to operate when hyperlocal delivery services were once again made available.
These quick and easy services enable customers to get groceries, pharmaceuticals and other essentials with ease and without taking unnecessary risks during this pandemic. Initially, investments dropped drastically, from a little under $2 billion in 2019 to $500 million in 2020. This required hyperlocal delivery startups to change their strategies, employ more innovative delivery solutions and make use of automated logistics services.
Final Conclusion
Hyperlocal delivery is steadily becoming a major player in the e-commerce and logistics industry. During the COVID-19 pandemic, it saw a sudden heavy loss followed by quick growth due to the inventiveness of hyperlocal delivery startups across the country. The hyperlocal market was first dominated by a few key players in the food delivery industry.
Now, this sector has opened up to businesses in nearly every industry that can operate on a small geographical scale. In less than a decade, hyperlocal delivery startups have grown exponentially. It has brought a new possibility for faster delivery services to the forefront of the eCommerce market. We hope this article gave you an in-depth look at hyperlocal delivery and how it has seen massive growth in the Indian consumer market.