On-Demand Economy: Introduction
As much as the term sounds complicated, the on-demand economy is a simple topic; the on-demand economy is an industry that provides immediate services or goods through a digital marketplace at users' convenience and time. Traditional businesses are shifting towards this sector as the rise of modern life is on a roll.
No one likes the wait between asking for services and availing of them finally anymore. The On-Demand industry revolves around the critical time of your customer. Today, thousands of companies benefit from this economy as the gig economy keeps on growing. The on-Demand Economy usually revolves around the travel industry, reservation services, e-commerce, grocery services, logistics management, taxi services, retail services, etc.
The on-demand economy works by taking a service like food, taxi, etc., and making them available through a digital platform. This helps in more efficient accessibility than ever. Many popular on-demand services are successful today-these include UBER, LYFT, UBEREATS, INSTACART, AMAZON FRESH, and urban clap.
1. Over 22.4 Mn users spend more than $57.6 Bn on On-demand services, as per the Harvard Business Review. 2. Users spend approximately $36 Bn on On-demand marketplaces, $5.6 Bn on taxi services, and $4.6 Bn on food/grocery delivery services annually. 3. Around 86.5 Mn US citizens are said to have used an on-demand service at least once in their lives. 4. Another report suggested that approximately 51% of people who contributed to online services in the on-demand economy saw a rise in their financial situation. 5. On-demand apps will touch approximately $335 billion by 2025 (PWC report). 6. The on-demand economy and such platforms focus on the need of the modern customer. 7. The on-demand economy continues to grow at an unprecedented pace worldwide. 8. It is also known as the "access economy." 9. Consumers and service providers connect through the app/website (online marketplace). 10. Technology companies are intermediaries and handle payments, information, and transactions. 11. The on-demand economy gives users a faster way to make payments, the facility to track orders when they want. 12. Numerous major e-commerce companies have started offering contactless delivery according to safety guidelines imposed by the government. 13. 42% of Americans have already experienced the use of on-demand services. 14. Experts predict services like plumbing, electricity, repairing, and beauty services will be in demand as users like convenience. 15. The on-demand industry has already affected the home services sector. 16. More than 25% of Britishers order food once a week and 50% usually once a month. 17. The on-demand economy brings more consumers, personalized platforms, home services, food, etc.
What is the On-Demand Economy?
We define the on-demand economy as the economic activity that digital marketplaces and technology companies have created to fulfill consumer demands by giving them immediate access to goods and services. The on-demand economy is also known as the "access economy" and is a convenient way to provide goods and services to those in the market. Thousands of companies are currently using the on-demand economy to provide people with convenience and earn millions.
The on-demand economy and such platforms focus on the need of the modern customer. Thus, they are at the top of their game because they give people convenience and save time. The main benefit of the on-demand economy would be ease and comfort for both the user and the provider. Companies have seen that on-demand economies help them with cost efficiency, scalability, profitability, and change of the traditional labor system. Obviously, big companies have already started investing in it before it is too late.
The on-demand economy is here to stay and is growing at tremendous rates. On-Demand market revenue was 57 billion dollars for 2017 and will grow to 335 billion dollars! this calls for innovators who believe that this sort of industry is the future of businesses. Even usage by customers increased to 58% in 2017.
How Does It work?
Consumer service and consumer behavior have witnessed a drastic change over the years. After the dot-com bubble, this is one of the tech industry's significant disruptions. The on-demand economy continues to grow at an unprecedented pace worldwide because of its clearly-seen benefits.
There are two players in an on-demand economy, one is a service provider, and the other is a consumer who accesses services or goods. These two players connect through the app/website (online marketplace) to perform this transaction. Technology companies are intermediaries and handle payments, information, and transactions. Also, with the increased digital transformation and technology-driven model of businesses, tech companies offer various jobs to on-demand workers. This falls into the category on-demand economy model where skilled professionals are hired to work on a contract base.
How Is On-Demand Economy Advantageous To Customers?
- People get to choose from multiple service providers for the same service.
- The on-demand economy lets customers track their orders.
- This economy provides more immediate access to products and services.
- The on-demand economy offers faster and online payment options.
- The on-demand economy allows users to rate and review products/services.
- Users enjoy a personalized experience and get the best services at cost-effective rates.
- The on-demand economy provides an easy, more rapid, and convenient purchase process.
How Are On-Demand Apps Witnessing an Uncontrolled Growth Amid COVID-19?
- Due to lockdowns and social distancing norms imposed by the government, people were, and some are, still afraid to go out of their homes to purchase essentials. On-demand apps deliver requirements at doorsteps, making it a more convenient option to buy items.
- Numerous major e-commerce companies have started offering contactless delivery according to safety guidelines imposed by the government. Also, digital payment eliminates human-to-human contact, making things easier for consumers.
- Faster access to goods and services enables people to trust the on-demand model and believe that they can provide satisfactory and sincere services.
What will On-Demand Economy bring?
42% of Americans have already experienced the use of on-demand services. This usage will grow as digitization occurs at higher levels in the next few years. Technology is changing the way we live, and people will be more invested in it than before.
The number of mobile phone users has passed 5 billion marks as of 2019. Adding to this, the fact that 55% of the civilization is part of urban life has opened doors for entrepreneurs thinking about this industry. Businesses realize the potential in diverse industries, and consumers embrace this new economy's benefits.
Enterprises are trying to find ways to make users engaged with their services. And it is pressurizing as new platforms emerge every day, so personalization of these services will benefit them. Businesses will be forced to connect their customers with personalized effects. The complex user behavior needs to be tackled with enhanced conversations and connections. Better, more intelligent customer services would be the way to go. Chatbots will undoubtedly be a part of this transformation. The chatbots that are being developed today are getting more intelligent than ever.
The on-demand industry has so many subsets depending on the services provided, and some of these services are laundry services, taxi services, tutor services, medicinal services, home services, etc. The taxi market is a crucial segment of this economy. Transportation runs the global economy.
Hence this incorporates a more significant part than other services. Innovators will be able to change the way we travel. Taxi services will be more modernized than before. These online platforms are getting a more significant share in the market in front of traditional rental services. This is causing the investors to focus the most on this sector.
Food and Others:
Food-related on-demand services are going to be better than before. More than 25% of Britishers order food once a week and 50% usually once a month. Even valuations for new food delivery companies are rising rapidly. However, The UK and the US aren't the only markets where the new food delivery services are experiencing growth. Some of the unknown markets where these services are growing at a more excellent pace are Korea, Saudi Arabia, and Brazil.
Trends show that the food, grocery, and logistics delivery system grew in 2019 at more enormous rates and will continue to flourish. This is due to predicted urbanization, mobile phone usage, and better business models. The employment this is going to create will promote the on-demand sector as a whole.
Trends show that the home services system has the potential to grow at more significant rates in the coming year. With our lives becoming busier, convenience and ease are the topmost priority of every other potential user. Experts predict services like plumbing, electricity, repairing, and beauty services will be in demand as users like convenience. The on-demand industry has already affected the home services sector. Statistics showcase that more millennials and the younger generation are entering the market. The onset of house development is causing the need for foster home services. This digital platform will benefit next year for these services. More of your competitors are sure to focus their home services business on the on-demand economy.
The future of the on-demand economy is brighter than before. Thus, you can let the online economy accelerate your business. Numerous businesses and enterprises need to decide whether they want to ignore this growth factor or embrace the developments.
AppsRhino is an app development company that focuses on on-demand apps. We help businesses grow and will guide you along the way. The on-demand economy looks easy, but it is not that easy in reality! You would require a focused team that believes in your vision. At AppsRhino, we work hard to make your on-demand idea a real success.