Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
First there was Ecommerce, then Mcommerce and now it’s the time for Ncommerce – the Neighborhood Delivery or Hyper-local delivery. A term coined by Vikram Upadhyaya – Angel Investor and Chief Mentor at GHV Accelerator – the segment has driven investors nuts with its growing popularity and reach, thereby pouring in millions of dollars within few months. Not only this, just like the ecommerce boom, the space is getting filled with new entrepreneurs, new concepts and hence, some really cool options for the consumers.
After some exciting startups like Jugnoo, Zopnow, Zopper, Grofers and Peppertap, next in line is Lazylad – a mobile channel, with an Asset light model, to the already present neighbourhood market. It was launched in April this year by the IITian trio, viz., Saurabh Singla, Paresh Goel, and Ajay Sethi. Currently working with a team of 20, with Lazylad, founders aim to eliminate the middlemen completely and make lives easier by taking over mundane tasks. As said by Saurabh, the app will also empower the service providers like the FMCG companies and retailers, thereby keeping a win-win situation for all.
The platform is operating in six categories – Groceries, Fruits & Veggies, Stationery, Bakery, Meat & Seafood and Flowers. There is no markup added to the cost for the customer or the seller. Right now, the app is available only on Android.
The founders accept the existing startups as competitors. However they also believe that nobody has been able to bring the complete neighbourhood on mobile. “We don’t see a competitor yet within the n-commerce (neighbourhood commerce) sub-industry. We are not just about groceries.. eventually we will be operating in almost 16 categories,” said Saurabh.
At the same time, investors believe that survival depends upon getting both the product and the model right. As per Vikram Upadhyaya- Founder of GHV Accelerator, it is important to understand and communicate the USP/differentiator about the model, and keep a check, so that their consumers perceive their Brand positioning as per their understanding.
Quick Facts About Lazylad
- Cities Covered: 3
- Number of families reached: 1200
- Repeat Orders: 80%
- Number of App Downloads: 6000+
- App Downloads by Women: 4000+
- Family Members Empowered: 18000+
- Total SKU Searched: 2 Million +
- Total Data Points Viewed: 10 Mn+
- Number of Seller App Downloads: 150+
- Total Orders: 3000+
- Total Gasoline Saved: 200 Litre
- Current Average Ticket Size: $6
- Number of Days Operating: 50
Funding And Plans Ahead
Lazylad has closed an early seed round of $100K, after GHV Accelerator onboarded them in May 2015. The team is planning to launch the iOS version in July and the Windows version later during the year. The company expects to add 50K sellers, 0.5 million downloads and 80K+ orders/day, in a year’s time.
Apart from having a pan India presence, there are plans of launching the app in other developing countries like Indonesia, South Africa – with a population of 249 million and 53 million resp., and a market worth of $13 billion and €62 billion resp. Currently their ambitious global expansion plan is to launch in at least 10 to 12 countries in the next 3 years.
Recent Funding In The Hyperlocal Space
Market Opportunity
The Indian retail market is $525 billion. Groceries alone is 60% of the total spend making it a $350 billion market. With the hyperlocal space, FMCG products can be sold online. The online grocery market is 1% of the total market which is expected to grow to 2% by 2020, making it a niche market of $10 billion.
Given the large target audience with growing number of smartphone users in India (204 Mn by 2016), and busier lifestyles, Hyperlocal is a growing niche. As per Vikram, with 99% of the retail still happening in the neighbourhood of the consumers, the hyperlocal space has almost the complete market to tap.
He added further that, with ecommerce giants like Snapdeal and Flipkart entering this space, says a lot in itself about neighbourhood commerce getting recognition not only as a sub industry but one big standalone industry in itself.
Editor’s Take
With its own set of challenges, ‘Hyper-Local’ is the new buzz around. However, the concept is not entirely new. Earlier, there were local startups such as Chotu.in, or global ones like Rewinery, Kozmo, Webvan, etc., but unfortunately they failed to took off. The new age startups are of the belief that this would take over e-commerce as it can serve more options in comparatively less time and with less effort. Also, with smartphones penetrating from 130 million to 650 million in India and around 2 Bn worldwide; more players entering into the neighbourhood space and huge investments, the future is n-commerce.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.