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Heard Of Areo Yet? You Will.

15 Apr, 2017
Heard Of Areo Yet You Will

Google. Hyperlocal. No Surprise.

Google, Hyperlocal, India. Big Surprise!!

Well, Google has finally stepped into the mushrooming hyperlocal services market – in India!

The search giant of the world has quietly launched a new delivery and home services app for India. The app is called Areo and is currently operational in Bengaluru and Mumbai.

The app covers a range of services including food delivery, home maintenance, fitness, electrical repairs, etc. – things an average Indian needs and uses around home. Hence Hyperlocal.

The app is not the service provider though. Like many others before it, Google’s Areo is but an aggregator of the existing services in the market. It works with local on-demand players like UrbanClap, Zimmber, Freshmenu, Box8, Holachef and Faasos, powering the reach of these partner firms by booking appointments, scheduling deliveries, and even enabling payments for them – all online.

We are constantly experimenting with ways to better serve our users in India”, a spokesperson for Google said in a statement. “In this case, Areo makes everyday chores and ordering food easier by bringing together useful local services like ordering food or hiring a cleaner in one place“.

Google declined to comment upon how it got into this market. The start point though, can simply be attributed to two things – the growing success of Google Shopping (in international markets), and the aforementioned mushrooming of aggregated and lifestyle services.

Another clue: The idea to launch this in India can be traced back to over a year ago. Reportedly Google approached Zimmber’s CPO, Siddhartha Srivastava about 9-10 months ago.
Srivastava said that “The search giant was keen on firms that own the delivery model and have a strong technology base“.
We have invested very heavily in honing our technology integration for this platform over the last 5-6 months, which is a cost for us”, Srivastava expanded. “We expect 10-15% of our revenues to come from Areo. That will be a cheaper marketing strategy for Zimmber. If they market Areo as they have done for other services or products in the past, the revenue growth (for us) could be higher“.

The service has been online and operational as a pilot program (only on Android for the moment), for Google employees for about three months now with Google actually footing the entire bill for the pilot service for its employees!

One must acknowledge that what Google has made quite a smart choice about how it has chosen to go about the idea. What Google has done is to hit a double-volley with the same shot: Instead of trying to build their own system for what is certainly quite a dynamic market, it has made use of existing resources and service providers (who are not only hungry for additional revenue, but would also give up their antique Standard Heralds bequeathed to them by their maternal uncles, for a chance to be listed as a Google partner).

But that’s not the smarter of the choices I was referring to.

The smarter of the choices made here is that Google has recognized that the market it is entering is not just a dynamic one, but also a very disorganized one. Far too many players already exist in the Indian hyperlocal services market and there is no convenient way for most users to chart through the mush, to try to identify the best option for their needs.

This problem of the unfathomable plenty, has caused the market to suffer the only known outcome of confusion – abstinence. Through the last year many players have shut down operations, while some others have consolidated their operations.

It is the potential to organize the market and make money while doing that (something that’s Google’s bread and butter anyway), that Google is banking upon, and hopes to take to the bank (okay, that one just felt nice rolling off the tongue. Not every word needs to have a point!)

Areo could potentially be a breath of fresh air for the user, and the suppliers, alike. While this would pose serious competition to players like Zomato, Swiggy and Amazon-backed Housejoy, it would also open up more avenues for the partner firms.

The immense, almost immeasurable fillip towards making their services available via the search giant’s platform, is bound to gain traction. The fact that it comes from Google will help it obtain instant credibility and should also open up a much larger audience.

There’s another implicit ploy that I can sense… Areo would also enable Google to compete with Facebook’s (recently launched) competing venture called MarketPlace.

This is not the first time that India has been a testing space for Google.  In the past, Google has tested new products like YouTube Offline, Google Maps Offline and more recently, YouTube Go.

Increasingly, we realise that we can try things in India — it’s a quick test market — if it works, we can take it outside. Our experience with YouTube Offline worked well in India and we transitioned it to other countries“, Google CEO Sundar Pichai had said some time ago.