Using Blockchain To Reinvent Hyperlocal Businesses
The blockchain technology and the concept of cryptocurrencies are fascinating banks, businesses- small and large, as well as governments and they are trying to find every possible way to exploit it. Therefore, the cryptocurrency market has risen exponentially reaching almost $378 billion in market capitalization. Seeing the figures we can say that in the future, the cryptocurrencies are certainly going to play a very influential role in the global financial system.
The understanding of most of the people regarding blockchain is often limited to Bitcoin and might be some other tokens. From this knowledge, they associate blockchain with payments. And the people, who have a high level of understanding, know the concept of executing logic on a distributed ledger or distributed application platform.
The on-demand service means an instant supply of goods and services ordered via the mobile app. You order something and receive it after 3 or 4 days, then it’s not on-demand provisioning of goods and services. We call it e-commerce which Amazon and eBay specialize at.
Therefore, in order to deliver goods and services on time, i.e. instantly the on-demand economy has turned into the ‘hyperlocal’ model of delivery. We already know about the ‘Uber’ model which is the hyperlocal model of delivery of service.
Recently, everyone in the business industry started talking about this new business model Hyperlocal. The term ‘hyperlocal’ in this particular business model refers to the business which is focused on a particular area, in and around our home. When we add the payments and the marketing options available in our area with ‘hyperlocal’, it becomes ‘hyper-local commerce’. Therefore, the businesses that are centred on a small community or a particular geographical area where they are based are known as Hyperlocal businesses. The consumer needs to install a mobile app where all the local grocery and mom-and-pop stores products are catalogued. The products are delivered in the shortest possible time just over a click.
The Working of an On-Demand Economy
In order to meet demand, the on-demand aggregators build a channel of their workforce to deliver products in the shortest possible time. The goods which are ordered are obtained, locally, from the merchants operating out of the brick & mortar stores. The aggregator receives commissions from both the parties involved in the transaction: the buyer and the seller. The money they receive is their profit used to keep up with their operating costs.
Blockchain & Hyperlocal Businesses
Blockchain provides a communication layer for the business processes to run smoothly and efficiently. It facilitates the processes involving multiple parties following regulatory guidelines. Here the technology is used to share documentation, communicate information, and track the different states of transactions. Blockchain technology makes the tedious process involved in the overall traditional supply chain to get as simple as possible. All the stakeholders involved can easily monitor and verify the transactions because of the transparent process. The legacy infrastructure is simply integrated with the new networks which provide improved functionality. The information sharing is done securely and confidentially which reduces fraud.
How Blockchain can help in reinventing the hyperlocal business models?
Consider the case of Uber/Ola itself. Here the centralized party controls the fare rates. So both the taxi drivers and passengers are not able to deal directly which in turn makes them pay more. If blockchain is implemented in such type of hyperlocal businesses, then the centralized party can be removed totally from the business. Both the taxi drivers and the customers can deal directly through the transparent blockchain powered application. This not only reduces the fare but it also reduces the overall cost of server which the centralized party maintains.
The company talking.im is already working on a blockchain taxi model where they are planning to achieve the above model.
iLINK is the first blockchain powered location-based social platform which has these 3 main functionalities: Geosocial, Hyperlocal, and E-commerce. This platform even has it’s own payment system which integrates almost every stakeholders involved.
iLINK‘s hyperlocal business is the directory and services that list out all the local business and services, they make information easily reach out to the local users.
Drop Zone – Hyperlocal Bitcoin Based Market Service
Built over bitcoin protocol, this Drop zone is nothing but a decentralized marketplace which facilitates buying and selling easy because of its secure communication layer between the buyer and seller. This project totally functions on blockchain and the testnet.
A small description of the item a seller wants to sell is uploaded to the blockchain and the buyers searching for goods search items located near to their location. Once the buyer gets proper matches, a secure communication link will be established between the buyer and seller directly. Once the communication channel gets created, both the parties can negotiate and come to a final deal price. The buyer can pay using BTC or any other crypto coin. After payment, the seller’s location is revealed to the buyer for pickup.
This concept of the decentralized marketplace has removed the dependency of third-party risks associated with the traditional way of dealing. At the same time, Drop Zone has several vulnerabilities such as issues like reputation selling and Sybil attacks which needs to be addressed.
After the recent buzz about the hyperlocal business model in India, many entrepreneurs showed interest in it. This particular business type has witnessed huge growth in the past couple of years because of public investments and technology growth. Ken Research, an industry research and information service company, has published its report on the Indian hyperlocal market. This report is titled “India Hyperlocal Market Outlook to 2020 – Driven by Rising Startups Firms and Fluctuating Investments” and it provides a detailed analysis of hyperlocal business segments.
According to the report, the revenue of the Indian hyperlocal market grew at a rate of 41% in 2015. It also reveals that the Indian hyperlocal market will grow at a considerable CAGR rate and is projected to exceed $343.6 Mn (INR 2,306 Cr) by 2020.