Hyperlocal & e-Commerce: Market Trends & How They Are Changing With Customer Behaviour

With skills in logistics & management and supply chain management, Naveen contributes to the development of business for the company with 20+ years of experience.

Indian consumers are used to their local neighbourhood mom-and-pop shops. All mom-and-pop stores, neighbourhood milk booths, vegetable stores and a Domino’s pizza outlet are good examples of a hyperlocal economy. With the emergence of e-Commerce hyperlocal now have additional features added to it with retail and distribution now enabled through webshops, aggregations, payment Integrations, Geolocations etc. usually using a mobile based interface.

The USP of hyperlocal e-Commerce business is to deliver products and services at a very fast speed. Two hours from order to delivery is something that hyperlocal delivery models are typically promising to their customers although lately, a few grocery players are piloting a rapid fulfilment cycle of fifteen minutes. Be it ordering food from restaurants that otherwise do not home deliver to ordering groceries in a short time has become very much possible and easier on account of hyperlocal platforms.

Hyperlocal delivery of groceries, fruits and vegetables has accelerated with the introduction of multiple online grocery stores, e-Commerce platforms and other delivery based startups that have forged partnerships with the local neighbour hood stores and supermarkets.

The pandemic has accelerated the growth of the hyperlocal e-Commerce sector with an increasing number of consumers both in metropolitan cities and small towns. Covid-19 pandemic made us reorganise our access to essentials and supplies in the prevailing times of constant lockdown, social distancing, and self quarantine. The pandemic has entirely changed the markets and the way India Inc. operated its businesses. The entire retail paradigm has shifted from mega malls and e-Commerce to hyperlocal economical units in just a few months. As the economy plunged during the lockdown, businesses started relying on locally available produce or resources to replenish demand.

The hyperlocal delivery model offers both convenience and efficiency both to the seller and the buyer. Since products are delivered to the customers relatively quickly, the model is rapidly expanding to Food, Grocery, Wellness, Homecare & personal care services, etc.

The need for faster fulfilment & the emergence of the latest technologies like Geolocation and contextual targeting tools are driving the e-Commerce sector into hyperlocalism. Hyperlocal players will extensively use artificial intelligence and machine learning technologies to solve key challenges in HyperLocal Fulfilment like managing peaks, route planning, order consolidation, timeslots and overall servicing costs.

Quick, flexible, and assetlight are a few of the key factors working in favour of a hyperlocal ecosystem. Ease of life and convenience for the end consumers as drivers results in the hyperlocal commerce model not only exploding in metro cities but also getting solid traction in tier two and three cities.

Enabling Hyperlocal commerce involves figuring out the overall supply chain planning & design. It must be ensured that reliable last mile connectivity is available maintaining unit economics. Also, the traditional Fulfilment centre network approach will not work, and multiple mini fulfilment centres/dark store networks will have to be established in the target markets. A burgeoning network will make it imperative to have realtime visibility & big data analytics capability to ensure optimal inventory levels to ensure no stockouts, simultaneously keeping inventory costs in control.

One of the key challenges is to ensure the unit economy works out for the hyperlocal business. The key metrics hence become the average value per order and the number of deliveries per person. The business must ensure optimal density to ensure economies of scale can be ensured. The second key challenge is that the nature of the business makes gig workers heavy on account of the fluidity of the business. It is a big challenge to constantly hire, train & retain & keep the workforce motivated to deliver superior customer experiences.

While the pandemic is still on, e-Commerce and hyperlocal businesses will continue to grow. The fast speeds of delivery being offered, added to the safety and convenience will bring still more customers in. Given the opportunities, specifically, India’s demography and the adaptation of technology, the hyperlocal space is all set for tremendous growth.