Hyperlocal on-demand delivery business model in rural India

Abstract

From the rise of the internet, our lifestyle has started changing. We are now communicating more over the internet rather than face to face. Our payment method has changed from cash to online money. Businesses also started changing. In 2008, the first smartphone launched and amplified our internet using activity by 100 folds. Now internet penetration in India is at an astonishing 87%. This many people using the internet have changed our mode of social activity and type of interactions tremendously. We are dependent on the internet now more than ever. Companies identified this opportunity and are coming up with innovative solutions and offerings to make our life much easier through the internet. Now, as on-demand economy rises, the need for traditional business models are getting lesser, and new players with new innovative offerings are emerging in the market like hailing cabs to getting a spa massage, purchasing groceries to repairing air conditioners, buying medicine to renting bike. These businesses with their mobile applications have made our life much easier, now ordering food is simpler than turning on the gas, much safer also. A report from HBR indicated that almost half of the users of these on-demand services are millennials. The number of users is growing exponentially and expected to skyrocket in the coming years. By 2020, the Indian hyperlocal market is expected to touch $2030 million. Though a lot of investors have shown interest in these kinds of business models and provided significant investment to grow and capture the market, the industry yet not seemed profitable as none of the existing businesses are generating profits. Some experts argue that this kind of business model is not sustainable and destined to fail. We will have a look at this report on the current business models in this industry by different players and their advantages & disadvantages as well as provide recommendations to improve and become sustainabl