Investors believe that hyperlocal m-commerce is set to give birth to the next series of billion dollar valuation firms, even as it helps people with their daily domestic chores
Hyperlocal m-commerce is indeed making its mark in the Indian retail industry and has started disrupting the e-commerce market with its ability to deliver almost everything and anything to your doorstep within an hour or two. A report by research firm Tracxn says that the number of venture capital investments in on-demand startups has increased from 22 in all of 2014 to 55 till date this and the capital deployed in this industry has more than doubled to $556 million. According to investors, this segment will definitely see the rise of next series of billion dollar valuation startups as it helps people with their daily domestic chores—an area where people yearn to be served. Moreover with increasing number of affordable smartphones in India, people prefer using services on the go and this has given birth to another segment in the hyperlocal m-commerce vertical where the customers don’t even have to download an app; instead they can just send a WhatsApp text and get their tasks done within an hour.
Dunzo, a Bengaluru-based startup works on providing goods and services to people purely by communicating with them through WhatsApp. Kabeer started off with Dunzo as a hobby and worked on his own for a couple of months but the amount of traction that he received, inspired him to turn this hobby into a business. “We literally believe that anything in Bengaluru is available within 60 minutes and we largely focus on delivering what you want by getting it from the store nearest to your address with zero delivery charges,” says Kabeer.
The convenience factor is what drove him to use WhatsApp as a medium to start this business. Dunzo uses the chat interface to its utmost advantage and tries to provide a personalised experience to its customers by creating a WhatsApp group for each of their customers where they can post their requirements. Users can also post pictures of what they need as reference points and the operators make sure that they keep you updated with their delivery process.
“Dunzo has replaced the search option and has managed to create a layer over all the hyperlocal apps that exists today. Moreover, I strongly feel that mobile cannot be a converted media of a website. All these apps-based hyperlocal startups look like a web product. What we are trying to prove is that mobile is a replacement of what you see, what you hear and where you are,”adds Kabeer.
Supertext is another Bengaluru-based startup which uses the same approach to help consumers get their daily errands done in a simpler way.
Mathew Johny, co-founder of Supertext says, “People use mobile phones mostly for texting, the idea was to use chat as a platform so that we can make services easier for people to access. Why download an app when you can go to the platform where majority of your customers are already in.” Recently, Supertext extended its services on Facebook Messenger to assist their users with their problems any time in Bengaluru.
Though this approach looks sensible and promising, investors are still hedging their bets on the ability of platforms like WhatsApp and Facebook Messenger to handle large scale deliveries and the ease of tracking your product that hyperlocal apps provide its customers with. K Ganesh, a serial entrepreneur says, “It is a platform that can help in capturing over 200 million people, it is a huge opportunity but it is 10 times tougher to execute a chat-based business model because it requires higher level of technology to get this business model work. And the execution of this technology is even tougher especially in terms of dealing with large scale deliveries.”
Kabeer admits that handling of large scale deliveries through WhatsApp is not that easy and they are therefore planning to launch an app by end of this month.
“WhatsApp is a great platform to distribute from. We got 6,000 customers from WhatsApp. It can be a painful platform when you have to get multiple tasks done at the same time. It is difficult to update the customers and we don’t want to lose on customers because of this. That is why we are launching an app. However, from the customer’s point of view they love the WhatsApp approach and we have never received any complaints so far and it will depend on them whether they want us to serve them through WhatsApp or through our app,” adds Kabeer. However, Supertext is planning to stick to the WhatsApp and Facebook Messenger approach and is not thinking about launching an app anytime soon.