HYPERLOCAL SUPPLY CHAIN

 

The term ‘hyperlocal’ refers to ‘a small area’ or ‘very specific demography.’ Hyperlocal on-demand delivery model is defined as a business model in which the service provider acquires requested product(s) locally and deliver the same to the customer in the same geographical area. Grocery delivery, ordering food, house care, personal care services, etc. have taken another dimension altogether ever since the popularity of hyperlocal e-commerce platforms rose.  The USP of hyperlocal e-commerce businesses lies in their ability to deliver products and services at unbelievably fast speed. Getting hold of the product you ordered within a short span of time as less as an hour is something that hyperlocal delivery models promise to their customers. Be it ordering food from restaurants that otherwise do not home deliver to ordering groceries needed by you in a short time has become very much possible and easier credits to the hyperlocal platforms.

 

How does an e-commerce hyperlocal marketplace work?

The hyperlocal marketplace model is a perfect example of how the technical advancements can amalgamate with the age-old favorite shopping methods and come up with a unique formula for success. A hyperlocal marketplace works by providing goods and services to the customers from the offline stores available within the proximity of a few kilometres. Think not only FMCG but also house maintenance, grooming and other services that are valuable for customers.

 

A fertile environment

Given the very focused geographic spread of a hyperlocal space, the local ventures are almost guaranteed visibility and customers until they ensure good product and service quality. It ensures product delivery at a great speed that too from the customer’s very local trusted store.

Indian retail is still dominated by brick-and-mortar stores and hyperlocal provides an opportunity for amalgamation of physical and digital stores.

Hyperlocal business models spell instant, on-demand delivery as they cater to needs of a more immediate nature. The gratification is far more accelerated – the entire transaction can be completed in an hour sometimes. Customers also tend to trust hyperlocals more than non-hyperlocal e-commerce websites, as the stores they buy from through online platforms have a physical presence, making it possible to attend to any grievances quickly. Further, the start-up can tap into existing infrastructure, acting as a bridge between existing retailers and the consumer.

 

A word of caution

Replication of a services model is difficult as maintaining uniformity across markets becomes difficult. When a product delivery happens, local people deliver it but if a person is coming to give a service, he represents the brand and should know how to handle a customer. This is where training becomes essential. As the services industry is rather fragmented, it is difficult to form partnerships with associations or groups of such service providers, as specialists are spread out across the country. The biggest learning will be the capability to scale. A hyperlocal that focuses on a single ‘locality’ will find it difficult to get the scale needed to create an economically viable model. Being able to identify a widespread but local need, and having a model that adapts to each new market will be crucial.

THE NEW NORMAL- NEW MARKET TRENDS

 COVID-19 has drastically changed the  buying pattern of consumers almost in all sectors. As more and more people work from home these days, they avoid venturing out into marketplaces because of the growing number of infections, hence more and more people are buying products online. Although this pandemic has become a bane for many sectors like the automobile, hospitality sector, etc., but for sectors like Consumer goods, Digital services, Ed-Tech, etc., this has been proving to be a boon resulting in increasing consumer demand, growing sales figure and increasing customer acquisition and many other parameters. I have highlighted  a few sectors where sales have been growing for the last few months and is also expected to continue trending upward in coming days.

 

Immunity Boosters

As the Unlock has started and people are gradually stepping out of their homes, households are trying to boost their health and immunity. Sales of Ayurveda products have skyrocketed during the lockdown. Companies like Dabur India Ltd. and The Himalayan Drug Company are witnessing rising demand for traditional products like Chyawanprash and Honey. Dabur Chyawanprash sales surged to 700% in the initial 3 months of lockdown (Apr to June) and the sales of honey rose close to 40%. The company is expecting the sales trend will continue to rise during the upcoming months as well. It has already launched a slew of immunity boosters such as Tulsi Drops, Giloy-Neem-Tulsi juice, and an immunity kit. More innovations are in the pipeline in view of the shift in consumer preference. The Haridwar based Patanjali Ayurvedic Company, One of the major ayurvedic companies in India, also reported a surge of 6% in YoY revenue and a nearly 40% increase in YoY profit.

 

Electrical Appliances 

Demand for large appliances in DIY (Do-It-Yourself) category has increased dramatically during this lockdown. As per economic times, sales of dishwashers have seen the highest jump at 500% growth compared to June 2019. Similarly, cloth dryers grew by 100%. This can be attributed to the reason of the absence of domestic help and other services in many big cities, people are doing things by themselves and experiencing the pain points, hence understanding the importance of these products. Philips India has recorded a surge of 60-70% in sales of its grooming products both for man and woman as the number of salons and spa-goers has reduced during this lockdown. Also, the demand for appliances like Vacuum cleaners, Big Screen TVs, Fridge and Refrigerators, Washing machines has increased for many electrical appliances companies. There also cases where because of sales surge, companies like Panasonic, Dyson, BSH Home appliances etc. are facing sold-out issues.

 

Packaged Goods

 

Sales of packaged foods have surged since March, as home-bound consumers stockpile familiar products that won’t go stale quickly. Breakfast cereals, instant noodles, rice, and cooking fats are among the products experiencing the strongest growth. The 82-year-old Parle-G recorded its highest sales figure during these lockdowns. Parle Agro Pvt. Ltd., the producer of Parle-G, has claimed a sales surge of 80-90% and a 5% increase in overall market share. This can be attributed to the reason that Governments and many NGOs distributed this product among poor and needy people. Other FMCG majors like Britannia, Nestle, etc. have seen a surge in sales and are expected to continue this growing trend even in post lockdown situation.

 

These are some of the sectors which are witnessing impressive figures in terms of sales revenue and profit.