Saahil Goel

The author is CEO and Co-Founder, Shiprocket

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5 Challenges In The Hyperlocal Delivery Market During The Pandemic

For the country’s e-commerce logistics market, the road to recovery has been slightly rocky, although the industry has gained immense traction over the past few months with innovative solutions driven by novel technologies.

Over the past 6 months, our lifestyles have been altered almost entirely. The pandemic and subsequent lockdowns created widespread disruptions for businesses across verticals. As the economy gradually reopens, businesses have resumed operations and are devising strategies to recover from the wrath of the pandemic, albeit with working models where safety takes precedence. 

For the country’s e-commerce logistics market, the road to recovery has been slightly rocky, although the industry has gained immense traction over the past few months with innovative solutions driven by novel technologies. If we delve deeper into the e-commerce logistics segment, it is evident that the hyperlocal market has been facing significant challenges despite gaining popularity with consumers and sellers. Several factors create these challenges such as a largely unstructured market amongst others. To gain better insights into this, here’s an overview of the roadblocks faced in the hyperlocal delivery market during the crisis.

Cut-throat competition

The advent of technology has indubitably made e-commerce one of the most sought-after and lucrative markets in the country with ever-growing consumer demand. This growing demand and profitable market have resulted in numerous sellers entering the industry, creating cut-throat competition. Even before the pandemic, the emerging hyperlocal delivery market in India saw fierce competition. Multiple movement restrictions and increased consumer preference for doorstep deliveries have led to countless brands delving into this space, making it an obstacle for the hyperlocal market to expand its presence through innovative solutions amidst the crisis.

Erratic operations

With multiple nationwide lockdowns, transportation was scarce, making it incredibly difficult for the shipping of goods that resulted in large-scale supply chain disruptions. While it was theoretically easy to deliver essential items to customers’ doorsteps, in reality, it was a daunting task to carry out operations efficiently mostly due to the unorganized and unstructured execution of government regulations. These led to irregular operations, thereby hampering customer satisfaction.

Insufficient manpower

Since the onset of the pandemic, there has been rampant reverse migration, leading to hyperlocal delivery brands struggling to meet the growing demand for doorstep deliveries without sufficient manpower. Despite companies creating opportunities for blue-collar workers to cater to customers’ preferences of cost-effective doorstep deliveries, it has been a hurdle for hyperlocal brands to carry out the deliveries with the same efficiency and effectiveness as hiring a new set of workers involves additional time and cost of training them. To add to the woes of hyperlocal delivery brands, containment zones due to the rising number of COVID-19 cases make it a mountainous task to ensure efficient and accurate deliveries.

Lack of awareness

Although a fast-growing market, hyperlocal deliveries are an emerging segment and several small and medium kirana stores continue to remain largely unaware of the benefits that can be availed from hyperlocal deliveries. For aggregators, this means that a staggering amount of funds need to be spent on both online and offline marketing strategies in addition to logistics costs, to make kiranas aware of hyperlocal services.

Additional costs

Small and medium sellers have by far been some of the worst-hit by the pandemic. With little to no revenue generation due to lack of business, they are already struggling with operational costs. To make matters worse, there are added expenses that are levied by brands to ensure that the small and medium stores are featured on the brands’ tech-driven platforms.

As the world continues to bear the brunt of the crisis, the hyperlocal market is facing challenges in reviving their business. While the pandemic is a temporary scenario, some of the aforementioned challenges need innovative solutions. Continuous efforts will alleviate the obstacles, paving the way for India’s hyperlocal market to achieve exponential growth.

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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