Hyperlocal marketplaces and their relevance in current times
The hyperlocal economy has undergone a change due to the COVID-19 pandemic. As the economy deteriorated, companies and consumers alike turned to locally available resources.
A simple definition of hyperlocal economy is 'a firm and its activities are limited to the same geographical area'. A hyperlocal economy includes all mom and pop shops, local haats, and vegetable markets. The revised definition, on the other hand, has additional features. GPS locations and mobile applications are increasingly used to manage retail and distribution.
The COVID-19 outbreak has altered the marketplace and the way India Inc does business. The whole retail landscape has moved away from malls and toward the hyperlocal market and ecommerce quickly. As the economy deteriorated during the multiple lockdowns, companies began to rely on locally available products or resources to meet demand.
As a result, everyone from consumers to businesses is eager to use hyperlocal channels to survive. One such example is Zomato and Swiggy, who ventured into grocery delivery in cooperation with neighbourhood kirana stores to satisfy consumer demand.
Projections and early trends
There was a research paper put together by Affle’s MAAS, a unified mobile advertising platform, and Sensor Tower (a US-based mobile app store marketing intelligence company). They jointly studied the key factors that accelerated e-commerce adoption in India and Southeast Asia in the recent past, and how COVID-19 has shaped shopping behaviour.
According to this research, the Indian ecommerce sector would expand by up to 84 percent in the next four years, primarily fuelled by the demand generated during the shutdown. According to a Google search study, the year 2020 witnessed an 8X rise in online searches for 'shops near me,' a 60 percent increase in searches for home delivery, and a 60 percent increase in searches for 'how to pay online.'
There is also a shift in how people transact, with digital wallets overtaking credit and debit cards as the most common payment method in 2020. Ecommerce has replaced in-store purchasing as the preferred method for companies of all sizes.
Given growing internet penetration and smartphone use, the online purchasing trend will only accelerate in the coming years. Buyers in Tier II and III cities turned to online orders and payment methods. Consumers across the board have become aware of the need for contactless delivery to reduce the danger of infection.
The hyperlocal industry in India has been primarily driven by an increase in the number of startups and consumers' "on-demand delivery preference". Hyperlocal enterprises in India use a flexible application to collaborate with merchants and consumers as a business strategy. In India, hyperlocal companies are primarily backed by technology and have successfully connected numerous local shops with consumers in the Hyperlocal market.
The last time the hyperlocal industry in India grew was when firms like Domino's and Pizza Hut began offering food delivery. Then, more restaurants began to provide home delivery. The years 2014 to 2016 were the peak of hyperlocal culture in India, with new firms such as Zomato, Swiggy, and Foodpanda seizing control.
What does it do for brands?
Hyperlocal helps brands with expansion – given that every region has its own flavour of hyperlocal, it can help build better market penetration through these collaborations, than having to invest in an entire go to market machine for every marketplace.
This provides a great branding platform, a delivery platform, an end-to-end logistic platform, and a perfect opportunity to acquire a new consumer base, engage with them – without any of the mayhem associated with having to roll this out individually. Having a presence on these platforms also provides brands with awareness on competition and strategies deployed within those specific marketplaces.
Aside from the reach, hyperlocal marketing has the potential for good return on investment. Brands may get their name in front of their target audience — the individuals who can drive into their stores the same day – by sponsoring local events or utilising local influencers in their social media content.
Additionally, hyperlocal digital marketing aids in the collection of online reviews, which may enhance the brand's local rankings even further.
Google's dynamic digital environment, localised web directories, social media, and mobile marketing enable companies to quickly interact with customers in specific locations and engage with local enterprises on a previously unseen level.
For most small businesses, it's a logical step, as the volume of business they perform with technology partners, shippers, carriers, and packaging suppliers are unlikely to obtain the economies of scale that a full-service third-party provider can deliver a single firm.
If they do it themselves, they won't be able to get the best pricing for web servers, fraud prevention, payment processing, web developers, tax solutions, warehousing, packing, and shipping. However, if it is outsourced to a partner, local contacts and devoted, experienced staff will significantly assist the small organisation.
Opportunity for brands? Scalability?
Despite the entry of numerous new companies, rising income levels, rising ambitions, favourable demographics, and cheap credit availability have accelerated and pushed the Indian retail industry to emerge as one of the most dynamic and fast-growing industries..
The online retail sector has been regarded as the next-generation model with excellent growth potential for future expansion. Retailers are striving to venture into e-retailing to use digital retail channels to reach out to more clients in Tier II and III cities (ecommerce). It indicates that they need to invest less money in real estate. In India, ecommerce is regarded as one of the fastest expanding commercial transaction channels.
With the inclusion of payment and marketing possibilities available in our immediate proximity, the term "hyper-local commerce" is coined. While the phrase appears to have gained popularity in 2015, it is not a new notion.
The rapid growth of Internet users, the expansion of payment alternatives, the proliferation of geo-location-aware gadgets, and the rising desire for instant delivery have all prepared the way for hyperlocal companies in India.
Of course, for customers, this feels like an extension of the tech-powered convenience they've grown accustomed to. They may enjoy doorstep delivery of things that are frequently required immediately, such as groceries, prescriptions, laundry, meals, and so on.
With the Chi-Square Test and Binary Logistics Regression, this research study focuses on adopting and embracing hyperlocal strategy in Indian e-Retailing enterprises to bridge the gap between online and offline stores and transform the face of Indian retail.
Despite the various good aspects of the hyperlocal environment, the sector also presents some challenges. As a result, while the hyperlocal model appears easy in principle, it is far more complicated to implement in practice. Keeping track of inventory with local merchants is one of the most challenging difficulties a hyperlocal firm may encounter.
The hyperlocal market model is crucial in India not just for customers but also for the industry's stability. Furthermore, the entire public may benefit greatly from this strategy.
The average person is limited to his or her house. They are having difficulty doing their daily shopping. As a result, a retail business that provides hyperlocal services can be extremely beneficial to the general population.
Edited by Saheli Sen Gupta
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)