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Why do Hyperlocal Delivery Startup Fails
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Why do Hyperlocal Delivery Startup Fails and How To Avoid Failure?

Sanjay Kidecha,

Running a successful business is not a piece of cake; successful business owners have to go through so many ups and downs before they bring the product/service to market. While there are so many successful hyperlocal delivery businesses, some of them have failed miserably in the beginning. Whether you are a new player or an established one, you must keep your hyperlocal delivery business safe. 

It is vital for you to understand what mistake or obstacle you can manage before you start making your business model. That is why we are here to guide you through. If you don’t want your hyperlocal delivery business to fail, this blog is for you. Without further ado, let’s get started.

Now that you are here to witness the fifth blog of developing hyperlocal delivery app series. Unlike others, we won’t only show you the good side of developing the hyperlocal delivery app, and we are bound to show you all the aspects. We know how much it takes to build an app, from your precious time to hard-earned money. Hence, you have to take care of your business and have to look at all the aspects. So, if you too are wondering why hyperlocal delivery business ideas fail, this one’s for you.

Because one wrong step and your hyperlocal business can fail, and all those efforts will be good for nothing. However, that is not possible when we are here to help. Let’s begin with the factors that may cause you major failure in the hyperlocal delivery business. 

If you are into the e-commerce business, you would know that it is difficult to foretell your customer’s behavior. To conclude your customer’s behavior, you have to take a step ahead of your competitors and transform your agendas and stay constant by all means. But how do you make sure exactly what your customers need? What aspects should you keep in mind to meet your customers’ demands? What are the ways to get an outstanding market response? 

The targeted customers of the hyperlocal delivery app will expect fast deliveries and super quick services from you. Hyperlocal e-commerce is striving to become a new big thing in the retail sector, and you have to keep up with your customers’ expectations. While you meet the expectations, you will also meet some challenges on that path. Here are the challenges that you can avoid:

To know all the answers stick to this article till the end as I, Sanjay Kidecha, CMO at Kody Technolab, unleashes all the answers for you. As we come down to the three of this series, I am going to state some reasons why hyperlocal startups failed and the mistakes that you can avoid to run a successful hyperlocal business. So are you ready? 

But before we move forward, here are the blog topics that the hyperlocal delivery app development series will contain: 

1. What is the Hyper-Local business Delivery model and How it Works?

2. Why It’s the perfect time to Invest in Hyper-Local Delivery App Development For Your Startup?

3. Top Hyperlocal Delivery App Idea to Start Your Business

4. What Are The Problems and Challenges For Hyperlocal Delivery App? Dos & Don’ts

5. Why do Hyperlocal Delivery Startup Fails and How To Avoid Failure?

6. Must Have & Advance Features For Hyperlocal Delivery App Startup

7. How to Choose Right Technology Stack For Your Hyperlocal Delivery App Startup?

8. Top Marketing Strategies For Your Hyperlocal Delivery App Startup

9. How much does it cost to develop a hyperlocal delivery app?

So, here is the list of mistakes that  most entrepreneurs make, but you can avoid: 

Why do Hyperlocal Delivery Startup Fails

Mistake 1: Entering the market without having an in-depth understanding of services and offers.

Market research is the most essential part of having a successful business, regardless of the fact if you are a blooming startup, launching a new product, or remodeling your business. You can miss out on many opportunities that can help your business grow in the long run if you skip the market research part. 

Suppose you thrive to become a successful entrepreneur. In that case, you must know your niche, your competitors, your clientele, and their needs and gather all the information for your business to signify. Not every product you launch will be for everyone. Useful market research will help you narrow down the real potential for targeted customers.  

Now what happens when you enter the market without researching is you can end up launching products that are already ruling the market. If your customers are already satisfied with other products, why should they switch to your product? 

So what is the solution for this mistake? 

The ultimate solution to this mistake is to do proper homework before launching a product in the market. Know your strengths and weaknesses and know your competitors’ strengths and weaknesses so that you can create something better and unique out of it. 

Why do Hyperlocal Delivery Startup Fails

Mistake 2: Sloppy delivery process (in terms of last-mile delivery):

What is the meaning of developing a hyperlocal application if you can’t provide quick deliveries to your customers? You have to be extra competent with the delivery process. It is understandable that last-mile delivery has few challenges like high cost, lack of transparency, and lower efficiency on the logistics companies. 

A solution to this issue:

When it comes to choosing the right logistics solution, go the extra mile, and check their skills. You can also cross-check the technologies they use for app maintenance. Ask them how they are going to take care of delivery persons and GPS tracking. 

Mistake 3:  Relying on a single platform

This is the widespread mistake that most hyperlocal eCommerce businesses make. Digitizing your business has become crucial nowadays. Your customers should be able to find you from all the digital platforms. If you think you can just get it by just developing an app or website, you are wrong. This thought can give you a significant failure. 

The ultimate solution to this mistake:

If we believe the research reports, your business will hit differently in the market if you are available on all the digital platforms. Customers acknowledge that the available brands on all the platforms are trustworthy. Hence they are more likely to purchase stuff from you. Be sure you provide products/services through the app, websites, and responsive websites.

The most prominent example is that Instacart, the leading grocery giant based in the USA, has integrated its business with all the platforms. Instacart promises delivery in an hour of service. This strategy has led the company to higher growth and profits. 

Mistake 4: Not making robust collaborations with the local retailers

Hyperlocal e-commerce has to be super fast and accurate in terms of delivering the goods. Local retail partners play a huge role in hyperlocal app delivery models. Being unclear about the income percentage will not help you build a strong partnership with your local vendor or local service provider. 


To build a strong relationship with your local partner, you have to plan your strategies collaboratively. Don’t forget to discuss the income model with their respective partner. 

Mistake 5- Neglect Investing In Marketing And HR:

If you are a start-up, the budget or finance can be a restriction but don’t make this mistake just like others because this will only take you to failure. Marketing and the HR department is the most critical and essential part of any business if you are willing to stay ahead of the competition. 

Some people are yet to accept that someone can deliver the service/ goods to their doorstep in no time. Without marketing, you can’t explain them, and without employing the right candidate in the team, you can’t get the expected results. 


Be wise and invest in a good marketing team. They can provide you great marketing strategies to make the right place in the market. The marketing part can cover up the campaigns that can spread awareness to your customers about your product/service and attract them with offers. 

On the other hand, HR will hire suitable and professional people for your business. 

In the end

There is no doubt that hyperlocal eCommerce will soon reach the peak, making it the best time to invest in this model. I think a business model has high chances of success when it is yet to be explored. 

If you are yet to bloom startup and plan to start off a business in this model, avoid these mistakes to provide your customers’ outstanding services. If you avoid the mistakes mentioned above, you are on the path to success. Now that you know why a hyperlocal delivery business app idea fails don’t repeat the mistakes and go-ahead for a brand new app idea!

However, there is more to this hyperlocal delivery model series, and we will be sharing more secrets in our hyperlocal app development series.

Sanjay Kidecha

Sanjay Kidecha is the Chief Operating Officer at Kody Technolab, where he seamlessly blends his expertise in operations, finance and technology to drive innovation and operational excellence. A passionate advocate for digital transformation, Sanjay writes extensively about how various industries can leverage technology to stay ahead. His insights on emerging trends and practical guides helps leading companies navigate this fast-paced tech world.

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