Exploring the viability of Retail Hyperlocals: A case

study of a Retail Hyperlocal in India

Keywords: Hyperlocals, Retail Supply Chain, E-commerce

Topics: Retail Operations

Word Count: 397

Abstract

E-commerce has revolutionized the Indian retail market in the last ten years. Various
factors such as technology adoption, internet penetration and increasing middle class
population made it favourable for these players to expand and thrive. Some of the
established players in this sector in India are Flipkart, Snapdeal and Amazon. One of the
latest trends in e-tailing is the introduction of retail hyperlocals (or the online grocery
stores).
Hyperlocals are firms which use technology to connect consumers with merchants
in a particular area. Convenience to the customer by making wide range of products (sold
by various merchants) available and providing doorstep deliveries is the core proposition
of these players. More than 90% of the retail outlets in India are unorganized retail store
(Kirana stores) and most of the organized retail stores are concentrated in the urban areas.
Thus, these hyperlocals found an opportunity to link up with both organized and
unorganized retail stores enabling them to deliver goods with low delivery times. High
growth potential of the online grocery segment has attracted many players such as
BigBasket, PepperTap, Grofers, and ZopNow etc.
In the first half of 2015, over 140 million dollars’ worth funding was raised by
more than 25 hyperlocal firms1. However, the second half of 2015 and the early 2016 saw
consolidation of hyperlocal firms, with mergers and acquisitions, and firms shutting shop
in few localities where they could not operate profitably. This led us to deliberate whether
hyperlocals are here to stay or whether they are just a passing fad.

1
http://yourstory.com/2015/08/hyperlocal-e_commerce/
 This study is aimed at understanding the various operational models of retail
hyperlocals and their value addition to the retail ecosystem at large. Using a case study
of a retail hyperlocal in India and secondary sources of information, we analyse the retail
hyperlocals on the basis of their marketing, operations and technology aspects and discuss
about their viability and sustainability. This study will add to the extant literature on E-
commerce and Retail operations by providing rich insights into the evolving retail
hyperlocal business models. It also provides inputs to practicing managers in this field by
helping them redefine their value propositions to enable them to operate profitably and
also enjoy high customer satisfaction and trust.