The global hyperlocal service market size was valued at USD 1845 billion in 2021 and is estimated to reach an expected value of USD 8183 billion by 2030, registering a CAGR of 18% during the forecast period (2022 - 2030). Companies offering hyperlocal services bring groceries, food, medicines, personal items, and other things to customers. Utility services include plumbing, house cleaning, lawn care, electrical work, and drainage. A network of men from local businesses or people provides all of these goods and services. Platforms for hyperlocal services assist restaurants, hotels, fast food restaurants, and shops selling fruits, vegetables, fish, and meat in managing and engaging with customers without having to bother about deliveries.
Easy access to the internet and the growth of smartphones have primarily increased the demand for hyperlocal services. The online food and grocery delivery sector is expanding due to a growing working population and rising income levels. A few top companies, like McDonald's Corporation, Domino's Pizza Inc., and Zomato, have also implemented contactless delivery services in response to the rise in COVID-19 cases. The demand for the market for hyperlocal services is anticipated to increase as a result.
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Changing Lifestyle and Food Habits
The demand for various hyperlocal services such as meal delivery, shopping order, home utility services, furniture delivery, and drug delivery has increased due to changes in consumer eating habits and busy lifestyles. Demand for hyperlocal services has increased due to rapid changes in enabling factors such as disposable income, customer tastes, the population of working women, and digitization. Moreover, an upsurge in demand for consumer goods leads to increases in the number of supermarkets, hypermarkets, and retail shops, which in turn boosts the growth of the hyperlocal service market.
The Surge in Disposable Income
A significant driver in expanding the hyperlocal service market is improving economic conditions. A gain in consumer buying power due to an increase in per capita disposable income also leads to an improvement in lifestyle, which fuels the expansion of the hyperlocal services industry. In addition, disposable income in the developing countries of Asia, such as India and China, has witnessed significant growth in the past few years, thus, increasing the expenditure on online shopping, which drives the development of the global market.
Digital Illiteracy and Limited Digital Infrastructure
During the projected period, a high level of digital illiteracy is anticipated to restrain the growth of the hyperlocal service market. This is explained by the fact that digital illiteracy restricts internet usage and hinders smartphone sales, which has a detrimental effect on expanding the market for hyperlocal services. Another major constraint on the market for hyperlocal services is the lack of digital infrastructure facilities for internet access. Most users of hyperlocal services use smartphone applications with internet access. Additionally, the lack of access to computers and the internet, particularly in schools and colleges, causes a rise in digital illiteracy, which restrains the market's expansion. For instance, just 21.3% of pupils in 596 government schools across 619 districts have access to computers, according to the Annual Status of Education Report (ASER) 2018. As a result, the growth of the hyperlocal service market is negatively impacted by all of these issues throughout the projection period.
Increasing Smartphone Penetration and Growing Internet Users
An increase in smartphone users serves as the primary growth enabler for the hyperlocal service market to grow. This is attributed to the rise in smartphone dependency for daily activities and needs such as billing, money transfer, and other services such as bus booking and movie ticket booking. The demand for various hyperlocal services, including food ordering, grocery ordering, drug delivery, and home services, has increased considerably due to the number of netizens across the globe, which is anticipated to offer lucrative opportunities for new entrants who plans to deal in the hyperlocal market.
The global hyperlocal service market is segmented by type, nature, and region.
Based on type, the global hyperlocal service market is segmented into food ordering, grocery ordering, home utility service, logistic service providers, and others. The home utility services segment accounted for the largest market share and is estimated to grow at a CAGR of 11.6% during the forecast period. Innovations in providing home services and user-friendly experiences are expected to boost the growth of the home utility services market. The growing adoption of smartphones is encouraging vendors to leverage digital media marketing to improve visibility and sales. Vendors send customers push messages and emails containing information about new services and offers to promote their business. With the help of social media platforms, customers are becoming aware of new home utility services. Home utility services are gaining significant traction and growing at the highest pace owing to growing e-commerce and m-commerce platforms. Furthermore, the increasing number of women working for the population and changing lifestyle patterns are considerable factors favoring the growth of the home utility service. Additionally, expanding digital marketing and promotion is anticipated to boost customer involvement and support industry growth over the coming years.
The logistic service providers segment is the second largest. Hyperlocal logistic service refers to the movement of goods between the provider and the receiver in a limited or small geographic area. Logistics includes transportation and warehousing, undertaken by the logistics provider for efficient and effective delivery. The growing use of technological-based supply chains, data analytics, and other highly developed software technologies in hyperlocal logistic functions is likely to enhance the efficacy of logistic function and credibility of logistic service, which will likely surge the growth of the hyperlocal logistic service market during the forecast period. Moreover, the growing e-commerce business has been largely favoring the development of the hyperlocal logistic service market. This is majorly attributed to various benefits associated, including one or two-day delivery, cost-effectiveness, trustworthy partnership, and flexibility in delivery.
Based on nature, the global hyperlocal service market is segmented into goods delivery and utility services. The utility services segment was the highest contributor to the market and is estimated to grow at a CAGR of 15% during the forecast period. Utility service is growing at the highest pace in the hyperlocal service market. This is majorly attributed to growing urbanization, standard of living, personal disposable income, and the increasing working-age population. Furthermore, hectic schedules and busy lifestyles have considerably led individuals to outsource various services to reduce their workload. Some services individuals can outsource plumbing, electrician, beautician, home renovation, and cleaning. Thus, the rise in outsourcing services is expected to boost the growth of the hyperlocal service market through utility services.
The goods delivery segment is the fastest growing. Growing efficiency in payment gateways, secure & safe delivery, and improved and eco-friendly packaging have driven the demand for goods delivery. Technological advancements in the delivery system and the proliferation of smartphones are further promoting goods delivery. Data analytics enabled technology usage in the various goods deliveries such as food, grocery furniture, and drugs, has reduced the delivery cost and helped to lead uniform standard of service. Growing e-commerce businesses and startups and their need for hyperlocal services are projected to encourage the goods delivery segment as e-commerce is considered the most engaging platform that deals in the delivery of goods in the high geographic area. Even e-commerce businesses such as Flipkart and Amazon plan to acquire hyperlocal services to reduce the cost and time of delivery. For instance, Walmart-owned Flipkart is set to launch a separate business vertical to cater to the 90-minute delivery of goods from local stores and its small fulfillment centers. Thus, the hyperlocal services market is expected to double its growth through the goods delivery segment during the forecast period.
Region-wise, the global hyperlocal service market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
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North America was the highest revenue contributor, accounting, and is estimated to grow at a CAGR of 14.3%. The market for online hyper-local services in North America accounted for the lion's share in 2016 and is expected to continue to do so throughout the forecast period. The main factor driving North America's online hyper-local services market is likely to boost overall market expansion during the forecast period. This usage of modern technologies in daily life is on the rise. In the U.S., UberEats is the fastest-growing meal delivery service, reaching out to industry leader GrubHub. A growing number of startup businesses and their funding partners in the U.S. is expected to boost the growth of the hyperlocal service market during the forecast period. For instance, according to NASSCOM, in 2019, the number of unicorns accounted in the USA was 203. A startup business valued at more than $1 billion is considered a unicorn in the venture capital sector. Aileen Lee, a venture capitalist, initially used the word. The following table highlights the ranking of the U.S. in world startup ecosystems. This ranking is expected to sustain during the forecast period, which is projected to boost the growth of the hyperlocal service market.
Europe is the second largest region. %. It is estimated to reach an expected value of USD 1570 billion by 2030, registering a CAGR of 21.3%. Deliveroo, a London-based food delivery company, is estimated to have pushed its valuation to around $4 billion, which is likely to put the company on track to increase its share of the food delivery market. This is majorly attributed to the growing demand for online food, high-level promotion, and advertisements coupled with heavy discounts, which attract consumers to order online. Europe is home to some food delivery giants: Eat, Takeaway.com, Delivery Hero, Deliveroo, Glovo, and Wolt have all slipped into the everyday lives of millions of customers across the continent — and are bringing in sizeable revenues as a result. Growing investment in the startup business and the backing of big giants to support companies at their nascent stage encourage young entrepreneurs to expand their businesses, which in turn boosts the growth of the hyperlocal service market. For instance, according to Dealroom data, venture capitalists continue to have a healthy appetite for the sector: over $1.76bn was invested in European food logistics and delivery businesses in 2019. In addition to that, food delivery platforms, including Deliveroo ($575.3m), Glovo ($350.9m), and Helsinki-based Wolt ($129.8m), accounted for the majority of funding in 2019.
Asia-Pacific is the third largest region. The Asia Pacific hyperlocal services market is studied across China, India, Japan, Australia, South Korea, and the rest of Asia. The region mainly contains developing countries with a high consumer base, growing purchasing power, and a working-age population, which attracts international giants to invest in this region. Hence, this factor is proving to be a market booster in this region for the hyperlocal services market. Growing disposable income, the working-age population, and the proliferation of smartphones have been driving the growth of the hyperlocal service market. It is expected to sustain its growth during the forecast period owing to growing investment in startups and government strategic support in the country's agenda. For instance, UrbanClap, a marketplace for freelance laboring in India and the UAE, raised $ 75 million in new funding to expand its business in 2019.
Furthermore, many international companies are foreseeing lucrative opportunities in e-commerce and working on destabilizing untapped businesses. For instance, ordering food online from pick-up restaurants is highly popular in China. Alibaba-acquired Ele. Me and Tencent-backed Meituan are the leading companies in China's online food delivery sector. Furthermore, besides having a vast consumer base and significant demand for consumable goods and services in India, growing investment in an Indian startup business is another factor driving the growth of the hyperlocal service market. For instance, according to the India Brand Equity Foundation, the online food delivery industry witnessed an increase of 150% year-on-year, with an estimated Gross Merchandise Value (GMV) of $300 million in 2016.
List of the key hyperlocal services market companies profiled