On Demand in Demand: The Economy of Tomorrow
With the expansion of two-sided markets, on demand economy has found a foothold in the Indian business economy. Transportation and food delivery industry, the early adopters of the model have set in a trend to uberize business models. It is rapidly replacing the traditional business model.
Technology has become the crutches to keep businesses afloat and reach their customers in the pandemic and being connected in this digital age, customers seek speed and convenience from service providers without comprising quality of work. This has fueled the expansion of on-demand services in India. Today, on demand services have digitally disrupted sectors like travel and transport; food delivery; healthcare; beauty and cosmetics; and Repair and Maintenance Services.
Millenials are the driving force of such growth, making up nearly half of the on-demand consumers. 29% of the on-demand consumers fall within the age group of 35–54 and another 22% or 55 or older.
This paves the pathway to build the Indian Economy of tomorrow as it provides increased value and accelerate revenue growth for interacting parties while also lowering the costs involved. This is possible as the two sided market taps into the crowd’s network and reach to compound the effects of the positive benefits otherwise enjoyed by a select few.
Features and Benefits like higher speeds of delivery, superior quality of service and feedback; and lower costs of service execution makes it a win-win and an exciting exchange.
The trade-off, however, is low loyalty and heightened competition from new entrants and traditional players alike, who can either bring creativity and cheaper costs of service execution or bigger financial muscle to outcompete the businesses trying to make a name for themselves as an on-demand service. So how does one establish and sustain a successful On-demand service business? Find out below
FUNDAMENTALS OF ESTABLISHING AN ON-DEMAND BUSINESS
- Target the right market niche: As each and every market segment is in disarray due to the pandemic, picking the right market niche is half the battle won. A market niche ,where there are lower barriers to entry and key areas of service are not being served by already established business providers, makes for an exciting and lucrative opportunity to establish an on-demand business.
- Integrate next-gen technology: As millenials are the driving force for the accelerated growth of the on-demand industry, using next-gen technology as the main touchpoint to attract, engage and convert customers is indispensable. Platform leveraged should be feature rich and should provide an enriched consumer experience.
- Strategic Pricing: Pricing of the service should intuitively highlight enhanced value vis-a-vis established and trusted service providers. While setting up the pricing model, convenience and speed of execution of service should be factored in.
- Offer multiple Services: As consumer demands are very dynamic, offering multiple services of similar nature can provide a safety net for the service providers and help capture a wider market share. It also ensures that players in adjacent markets, building upon their success, do not undercut you when expanding into your niche.
- Share the spoils: Looking at the other side of the coin in this two side market business model, executors of your service such as the food delivery persons, repairmen, cab drivers leverage your access to larger network of potential customers for their livelihood or as a source of supplemental income. Your success is their success and their success is your success. Passing on and sharing the captured economic value generated by your success and increased market share, will further attract and widen the pool of providers and executors and improve the quality of your service as a consequence.
In closing, on-demand services provide would-be consumers access to top quality service with minimum touch points in between and lowered costs, enriching the consumer experience. The Uberization of business models is here to stay and will provide improved success to businesses going forward.