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7 Challenges in the Hyperlocal Delivery Space

7 Challenges in the Hyperlocal Delivery Space

Are you planning to get into the hyperlocal delivery business? Know the challenges faced in the hyperlocal delivery space here and how to overcome them.   

The online purchase of products is no longer limited to eCommerce sites but has expanded to purchasing local items, especially groceries and essential daily items. To meet customers’ needs, the concept of hyperlocal delivery space came into the picture. As per the Statista data, the total funding in the hyperlocal and delivery sector across India by leading companies crossed 1,500 million US Dollars in 2020. This trend of hyperlocal delivery has increased ever since the pandemic. 

However, managing the hyperlocal delivery space is not as easy as it seems to be. For a smooth hyperlocal delivery space, it is crucial to manage operations, deliveries,  fundings, profits, etc., well to remain in the business in the long run. Acquisition of customers and their retention with the best experience and service is challenging. 

Before we dig into understanding the challenges faced by hyperlocal delivery businesses, let us first understand what hyperlocal space is and how it works. 

What is Hyperlocal Delivery Space?

Hyperlocal delivery space is different from the regular online delivery environment, mainly through eCommerce websites. Hyperlocal deliveries are specifically to fulfill the requirements of residents, and it allows businesses to deliver products within a confined geographical location. In the case of the hyper delivery model, the residents are connected to the nearest market space or the seller to serve them.

One cannot deny that the hyperlocal delivery model works effectively for fast delivery, and it has gained an advantage ever since the outbreak of pandemic. Nevertheless, hyperlocal delivery isn’t as simple a model as it seems. We will discuss several challenges and shortcomings faced by hyperlocal delivery companies here.

Challenges Faced in Hyperlocal Delivery Businesses

Hyperlocal Delivery Business is an excellent idea to meet the demand of residents, especially those who look for fast or urgent delivery. However, with every new idea and business plan comes several challenges and problems. Let us figure out some of the challenges businesses face in hyperlocal delivery businesses knowing which can help avoid problems when into the business.

1. Unawareness among micro merchants 

To run a hyperlocal delivery business, you need to connect with the local shops and convince them to go online. Although online business is no longer a new concept, several store owners and smaller shops are still unwilling to go online. They are still reluctant to connect with the hyperlocal delivery businesses either due to the lack of understanding about the platform or trust issues.  

2. Choosing the right geography 

Before moving into a hyperlocal delivery space, choosing the geographical area with target customers is essential. People in many regions are still unwilling to connect with local retailers online. Hence, it is necessary to research the marketplace and geographical area before connecting with the retailers and establishing hyperlocal businesses.   

3. Adding the appropriate services 

The hyperlocal businesses keep adding services and features to their app to attract more customers. However, the service sometimes remains unfulfilled either due to the unavailability of personnel, time constraints, or unavailability of local sellers or service providers. Hence, it is essential to understand the purchase pattern of customers and the local market before expanding services.  

4. Competitive platform 

Several brands are already in the hyperlocal delivery business. Hence, new companies need to give the best services to the customers to survive in the competitive space. The records show that many hyperlocal delivery companies like FoodPanda, PepperTap, UberEats, TinyOwl, etc., that started well were closed or consolidated with other businesses. The reason was mainly the lack of proper management and operations team.    

5. Raising profit

One of the biggest challenges faced in the hyper-local business space is that customers are unwilling to pay any delivery amount or somewhat willing to pay bare minimum delivery charges. Hence, hyperlocal delivery companies usually rely on commissions from sellers. The average order price margin must be well defined to get the maximum benefits at the end.   

6. Delivery management 

Businesses into hyperlocal marketing usually do not have permanent delivery boys and depend on locals who register to pick up and deliver products to end customers. It is essential to connect with reliable and loyal personnel failing, impacting customers’ trust in hyperlocal delivery companies.    

7. Timely delivery

Hyperlocal delivery spaces are for fast delivery. Timely delivery with many arbitrary orders makes it challenging for hyperlocal businesses to manage orders, especially when there is a dearth of delivery executives.

Conclusion

It is essential to have an excellent tech-savvy app and operations management team to get timely notifications from sellers about the inventory and connect with reliable executives to get the delivery done on time. 

We hope the above information is helpful for you to understand the concept of hyperlocal delivery space and the challenges associated with it. 

If you need a hyperlocal delivery service, you can get in touch with Pickrr—all-in-one shipping solution for businesses. We will help you provide the best service in your preferred geographical location.

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