July 23, 2024

Rapid adoption of digital platforms to boost the growth of Hyperlocal Services Market

The global Hyperlocal Services Market is estimated to be valued at US$2340.7 Mn in 2023 and is expected to exhibit a CAGR of 13% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Hyperlocal services involve delivering goods and services within a comparatively small radius, such as a few miles, by integrating online interfaces with offline commerce or service transactions. These services include food delivery, grocery delivery, package delivery, laundry and dry cleaning services, utilities, and other on-demand services that are available within a small geographical radius. The rising adoption of smartphones and increasing internet penetration have enabled the rapid growth of on-demand hyperlocal services.

Market key trends:
One of the key trends in the hyperlocal services market is the rapid adoption of digital platforms for ordering and delivery. Companies are increasingly providing apps and websites to enable users to place orders for delivery of products and on-demand services conveniently through their mobile devices. This has boosted the reach and accessibility of these services multifold. Another major trend is the integration of artificial intelligence and machine learning technologies by hyperlocal companies to optimize operations. Players are focusing on improving the customer experience through technologies like predictive analytics, automated order sorting and dispatch, and dynamic pricing. This is helping companies to scale up operations and better serve customer demands.
Porter’s Analysis:

Threat of new entrants: Low capital requirement and availability of technology is making the threat of new entrants high in the hyperlocal services market. Brand awareness and economies of scale allow the existing players to cater to customers at low costs.

Bargaining power of buyers: Buyers have moderate to high bargaining power due to low switching costs and availability of substitutes. Buyers can easily switch between online delivery apps based on price and service quality.

Bargaining power of suppliers: Restaurants and cloud kitchens have low bargaining power against the hyperlocal service players due to their reliance on platforms for generating orders and revenue. Suppliers have to adhere to the commission structures and terms mandated by platforms.

Threat of new substitutes: Threat from substitutes is high with the introduction of new business models like dark stores. Grocery delivery startups providing speed and locality are attracting customers away from food delivery platforms.

Competitive rivalry: The hyperlocal services market is highly competitive with the presence of global as well as regional players. Intense competition exists on parameters like delivery time, commission rates, variety of cuisines and use of technology.

Key Takeaways:

The global hyperlocal services market is expected to witness high growth, exhibiting CAGR of 13.% over the forecast period, due to increasing preference for quick commerce among consumers. High penetration of smartphones, improvements in logistics infrastructure and expanding digital payment options are fueling the growth of hyperlocal delivery models.

The Asia Pacific region is expected to dominate the hyperlocal services market during the forecast period. China, India and Indonesia have emerged as lucrative markets owing to large population base, rising income levels and increasing internet usage. Regional players like Swiggy, Zomato, Foodpanda and Grab have captured significant shares in APAC hyperlocal delivery space.

Key players operating in the hyperlocal services market are GrubHub, Just-Eat, Swiggy, Delivery Hero, Foodpanda group, BOXC, Shipster, and HelloFresh Group. These players are investing heavily in new technologies like AI, IoT and machine learning to optimize hyperlocal delivery operations, manage demand volatility and enhance customer experience. Partnerships with restaurants and cloud kitchens have also been a key focus area for platforms