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Dimpy Dewan

Co-Founder, Hanchens

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Trends In Same Day Logistics Market Accelerating Small And Large Businesses

Hyperlocal logistic companies are going to be a massive game-changer and a tool to create exceptional user experience in current and unexplored markets.

The outbreak of the COVID-19 pandemic has showcased unprecedented challenges to the physical movement of products and customers. Since then,small retailers and large online players have looked for unique ways to ensure seamless and swift delivery of products to customers. The restrictions on physical movement, accelerated adoption of technology, arrival of boomers in online ordering, and mindset shift has opened new doors for the hyperlocal express logisticsmarket.

In recent years, the growing demand ofdoorstep delivery of food, groceries, electronics, household essentials including medicineshas gained immense popularity, thus making the Indian hyperlocal delivery market a business reality and the new normal.

Gone are those days, when small and big purchaseswere plannedfor evening or weekend shopping. Demanding work schedules, availability of local options andon various apps have pushed users to make last minute purchases, which also has crossed all barriers of product category and price. Lets not be surprised when a packet of spice is ordered 2 hrs prior tocooking a meal, and an LED TV is ordered in the morning to watch an important match in the evening. The race to Express / same day delivery, has made purchases and its use as the need for Now or Never.

According to the estimates – the global hyperlocal service market is projected to reach $3634.3 bn by 2027 with a healthy CAGR of 17.90% from 2021 to 2027.

Urgent need for essential products

Customers are more open to order anything and everything online. And wht not, when there are so many options available online! Having said that, Hyperlocal delivery companies have become the face of a brand and the only parameter “to Aquire” and to further “Satisfy and Retain” the current users. The tussle between retailers Vs aggregators Vs Direct to customer brands to get more orders on their platform, is never-ending, thus making last mile logistics a competitive edge to score on. In summary, Hyperlocal logistic companies are going to be a massive game-changer and a tool to create exceptional user experience in current and unexplored markets.

Communities and localities have a desperate need for essential and daily products that users expect to be delivered in record timeframes. To cut down on delivery and replacement timelines, customers’have become prudent to purchase the product either from a local seller or check if dispatched via hub / warehouse as close as possible. This user behaviour has made nearby local shops, hubs of Online brands as the storehouses for essential items. Delivery companies focus to fulfill the customers’ demand by picking the package directly from the seller, or micro-hub making the whole process convenient and reliable for customers. In addition, the complete focus and process, that is limited to a specific geographical area ensures express delivery in 60 to 90 minutes or the same day.

Demand for faster deliveries

Time sensitivity has always been a major concern in the logistics market. Traditionally, it used to take three to seven business days to get an item delivered. Now, waiting for even two days seem intolerable for customers. Customers’ demand for quickdelivery is no more a frill but a new normal. To meet the quick delivery demand, retailers and online players are betting big on express / same day delivery models to keep up with customer expectations and experience. To meet such demand, India will see a massive shift and enhancement in supply chain operations with E-Commerce players finding more and more value in outsourcing End-to-End Micro hubs / dark stores and mid/ last mile logistics to professional players’to further leverage them for Omni presence.

Time has never been of Value before

Customer prefers attending to an important official call, family time, OTT time, quick nap, a hobby, Vs the hassle of spending time, effort and money on physical shopping of products that no more requires a touch and feel with superb offers and replacement guarantees when purchased in online mode. With petrol rates at an all time high, paying for shipping charges is not a limiting factor for a customer anymore. Convenience is clearly chosen over everything else and this mindset progression in times to come with app penetration is inevitable. Further, with the festive season approaching amid the rumors of the third wave of COVID-19, customers would prefer their parcels at doorstep in shortest timeline possible rather than exposing and spending time in busy streets. All this generate opportunities for local and online players to engage delivery companies with focus on catering to smaller communities.

Less burden of logistics on small retailers

The sudden boom in the e-commerce industry impacted the businesses of small and local retailers. However, with the arrival of the hyperlocal logistics, opportunity to sell online could now be leveraged by traditional stores. Being a retailer-friendly delivery model, it puts less pressure on the retailer to ship and deliver their products to nearby customers without having the hassle to find and manage fleet, create route, protect COD and other field operational challenges. The retailers can easily now retain their existing customer base with minimal effort as everything from pickup to delivery is managed by hyperlocal delivery company. Before e-commerce brands expand into micro-hub model to create community presence, this presents a great opportunity for local retailers to build and grow their stores as ordering from local store ensures the customers do not have to go through several checkpoints. It also makes revenue generation quick and yields returns in the quickest way possible to the retailer.

What’s next?

Though the hyperlocal delivery model in Inida is unstructured, unorganized, limited and in the hands of local manpower agencies, it is making steady progress through hyperlocal delivery brands and before we know it would have taken a giant leap, just like e-commerce businesses. Healthly competition in this industry is a must as the volume is so large that it cant be catered by a handful of logistics brands. By adopting new-age technologies, hyperlocal delivery players will be seen playing big on efficiency and bringing down their operational costs. Industry outlook will change and the dependency of large online players and new entrants in India is only going to increase on hyperlocal delivery brands to build sustainable and qualitative supply at a national level. We will also see small retailers leveraging professional hyper-local services to rise and implement more customer-friendly business models to acquire local customers and retain the existing base.We shall also see massive shift towards eco-friendly deliveries offered by Hyper-local players, but they will also learn by making few mistakes through early adoption on account of limited / no charging and swapping stations, and limited availability of electricity in the localities of the fleet who is expected to charge and report for duty next day. Lastly, in the next 5 years we will see a visible and a remarkable change in how Women will come to the forefront of Last mile logistics. With that, we all as a community of sellers, users and providers carry a collective and social responsibility to provide them with safe, respectable and encouraging work environment.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house



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