Startup Model – Hyperlocal Mobile Marketplace for Used Items

THE MODEL: A platform for users to buy and sell used items in the nearby area.

STARTUP: Wallapop (Spanish startup)

WHAT I LIKE

Core Idea – Hyperlocal classifieds is a good concept as it helps differentiate from the existing players and also increases the chances of deal conversions.

Niche – Focusing on trading items ensures a clear and rich experience for users.

CONCERNS

Competition – Existing players with huge traffic may not find it very difficult to add a hyperlocal section to them.

Startup Model - Hyperlocal Non-Conventional Advertising

The Model: Building an online marketplace for non conventional ad-spaces. Some examples would be gyms, schools, restaurants, spas, PGs, hotels etc. Advertisers would get to search for the best, most suitable options where they can advertise. Space owners will get better visibility for the spaces they own.

Startup Doing It: Paintads (India)

What I Like:

Core Idea – There clearly exists a need for this kind of a discovery cum booking platform. The aim is to get advertisers the best ‘Return on Advertising Spend’. Also space owners will get a place to exhibit and promote the spaces they own.

Market Exists, No Awareness – Non-conventional advertising has not been able to create a place for itself in the advertising budgets of companies.

Scalable – The aim should be to create a marketplace, where sellers and buyers engage with each other on the platform. Using this model, the business can scale well.

Low Competition – There are hardly any players operating in this space.

My Concerns:

How Big is the Market – Since there are no official figures of the size of the market, how big it is and can be is a question which is unanswered (although it looks big enough on the face of it). 

Interesting Startup: GROFERS

GROFERS

Grofers is an on-demand delivery service connecting local shops with consumers. It was one of the first companies in India to create a hyperlocal marketplace for goods, starting with groceries. It has raised a lot of funding and has shown good growth in the Indian market.

Why I find this interesting?

- Essentially a delivery service; Fulfilling orders by procuring from local vendors; Scalable
- No capital required for buying inventory
- Shortest delivery time since goods are purchased from vendors closest to the customer's location
- Strong competitive advantage since big e-commerce players like Amazon & Flipkart will find it difficult to establish last mile logistics
- Lower delivery costs since delivery is done locally and does not involve large distance/intra-city logistics

My Concerns

- Margins are limited since goods procured from through retailers primarily
- Limited products for customers since only products which are available locally are shown
- Profitability is more difficult to achieve

Grofers and other startups operating with this model have seen a lot of interest from investors in the past. Profitability will be a key concern going forward. I feel the model has a lot of value and is here to stay in the long run.