State of the home service aggregators in India — Part I
The year 2009–10 was a watershed year for the worldwide services industry. It marked the birth of unicorns like Uber which redefined the on-demand services space, closely followed by companies like Homejoy, Thumbtack. Ola did something similar much closer home, with UrbanClap, HouseJoy following suit — their mantra was the same— infuse technology into the unorganized, status quo sectors to empower millions of blue collar workers. And boy they did disrupt their respective industries in a big way! If Ola shook up the likes of Meru, UrbanClap & HouseJoy started unbundling and curating the directory services like JustDial & Sulekha while on-demand food logistics startups like Swiggy carved their niche.
Thus the online service aggregators were born, with a promise to be a one stop provider for all your home services ranging from a plumber, electrician, home cleaning to beautician and more professional services like accountants and tutors. It was a lucrative model for both sides, the customer got different verified service providers under one roof(or to be precise app), the service providers were a happy lot with a steady stream of qualified leads to pursue and the aggregators took a cut from each transaction. Gone were the days where a service provider had to advertise on platforms like JustDial with no clear ROI, with the aggregators you pay for what you get either per lead or as a commission on every conversion.
What has propelled this change is the surge in internet and smartphone penetration in Urban India, time constraint of working couples along with the steady rise in disposable income to outsource jobs such as home cleaning to professional service providers or avail doorstep beauty services. Swiggy has helped restaurants grow beyond their physical real estate and Ola has helped driver partners earn at par with white collar jobs, these platforms were so compelling that it attracted college students and even white collar employees to jump in to earn a quick buck. Investors placed their bets at an estimated $1bn(Source — Inc42) in this space including giants likes Google and Amazon entering the fray. There have been a fair share of shutdowns too with ambitious startups like Taskbob, TinyOwl, PepperTap which went the HomeJoy route, leaving lessons for the survivors allowing them to pivot into more feasible revenue models. All these companies are fighting it out for a pie in the burgeoning $10bn home services industry spanning across 10s of categories.
When Uber/Ola hit the on-demand taxi services in India, incumbents like Meru were sitting ducks and were pushed into a niche, with many former vendors moving their fleet to the more lucrative newcomers who were luring both customers and partners with discounts and offers enabled by VC money. Incumbents in other sectors were more cautious. For example, in the home cleaning sector, veteran players like Avon(part of Quess) have their subsidiary Helpr addressing the domestic market, McLean a veteran in facility management space has a dedicated portal for domestic orders and Hicare(acquired by ex-Godrej MD from global FMS giant ISS). Similarly Quikr acquired Zimmber last year to diversify their portfolio into home services space.
So where do these startups go from here? Swiggy has already been jittery over the past few months with aggressive moves from Zomato, harakiri employees and it’s inability to achieve sustainability after multiple rounds of funding. Amazon has been eyeing the home services space in the US and has already invested in HouseJoy last year. Google has launched Areo a food & home service delivery app which acts as a super-aggregator by bringing together the likes of Zimmber & UrbanClap under it’s hood.
I would share my views on the road ahead in Part II of this post, stay tuned.
