India’s On-demand Home Service Market is Ripe for Disruption

  • Published on - Dec 06, 2022
  • 4 mins read
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Indians have never embraced the DIY culture and prefer the DIFM (Do it for me) instead. And thus, home services were always outsourced to the neighborhood service provider, despite their questionable quality, reliability, and punctuality. But the rise of smartphones, cheap internet, and a rising middle class has fueled the growth of the on-demand home service market. This industry gained even more prominence during the pandemic and has been growing steadily.

It's no wonder that India is one of the significant contributors to the global growth of the online on-demand home service market, which is expected to grow by $4.75 billion from 2021 to 2026 at a CAGR of 60.77%.

Market Challenges

Initially seen as a frivolous expense by the Indian middle class, it has since become mainstream for many families. And, given the continuous need for home services, there is vast growth potential.

The market share is divided between one dominant player offering all the services under its umbrella and other smaller and specialized alternatives. However, these players operate primarily in tier 1 and a few tier 2 cities. Considering the untapped potential and the low barrier to entry, many new players are entering the market. However, now that the pandemic is largely over, customer expectations have changed drastically.

During the pandemic, the chief concern of the users, was the hygiene of the service person and the service cost. But today, their focus is on quality, efficiency, and user experience. The businesses that fail to offer this will be relegated to obscurity.

How can new entrants grow effortlessly?

This industry is still nascent, and with the low barrier to entry, new entrants can easily make a mark here. But they must take care of the following aspects.

Partner Training

  • Businesses in this sector act as aggregators and must work with multiple partners and vendors to deliver the services to the users. These vendors must be onboarded into their system and be trained in the standard operating procedure to keep the service consistent. They should also create training sessions for the vendors specific to their category and take tests to check whether the skills have been imbibed.
  • Businesses must strictly enforce quality standards to ensure that customer is satisfied with the service. In addition, they should monitor the performance of their vendors and upskill them when needed.

Customer Engagement

  • Customers are used to a simplified, omnichannel experience across all the platforms they use and will also demand the same from you. And in today’s hyper-connected world, where a single bad review can impact a business, customer experience is of the utmost importance.
  • Businesses must analyze all the customer data at their disposal to create personalized offers and experiences for their customers. They must also simplify the application's user interface so that a user can book a service with minimal effort. Once a service is booked, the application must communicate the customer's preferences to the vendor to manage the entire process seamlessly.
  • Support is another area of concern. If things go wrong, customers must be able to reach out to the support team quickly and express their concerns. The support team must have contextual information about the customer and should understand and resolve the problems at the earliest.

So, how can businesses achieve all this at scale? Adopting intelligent solutions can help them do that.

How can technology help?

Businesses must be agile and quickly adapt to the changing market trends and customer preferences. They can do that by leveraging innovative solutions strategically in their business.

Using communication solutions, like Zoom, can help them communicate with the vendors/partners and help with the onboarding processes. They can store their training modules on the cloud and make them accessible to all their partners/vendors.

Cloud CRM and toll-free services will help businesses understand customers' needs and personalize their offerings accordingly. Businesses can also protect their customer and partner data using security solutions like endpoint security, virtual firewall, multifactor authentication, and more.

Businesses can look for individual solutions that meet their needs or can save costs by partnering with an end-to-end solution provider, like Tata Tele Business Services.

Way Forward

While the online on-demand home service industry is still nascent, it's already ripe for disruption. A large percentage of India’s population in small towns and villages, who are now used to online payments, have still not been targeted by the industry. And with customer loyalty up for grabs post-pandemic, a new entrant can still corner the market by offering a distinctive value proposition and leveraging the right mix of smart solutions. But until that happens, it is anyone's game.

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