On-Demand applications are ruling our day to day life. Almost every business has come up with an application facility. This clearly shows that every startup and established business has realized the importance and demand for the applications. The business owners have made an effort to understand and give the best to their customers. In that way the started adopting the on-demand applications which paved the way to the evolution of the On-demand economy.
With so many benefits the on-demand applications have changing the world around us. Starting from food, healthcare, moving services, education to online dating, it made everyone’s life so much convenient, scalability, cost-efficiency, and profitability. This industry has not regained its peak over a night. It took a few years to get this success rate. What made it happen? Without taking much time, I will explain it. Various business sectors are the reason for the increasing demand for the on-demand economy. From that, we will discuss a few sectors in this blog.
What is On-Demand Economy?
An on-demand economy can be defined as a service or a product that is built on a request from the users. It can be a physical object, a data, or even a service that has to be done soon after. The industry is built with the basic concept of fast fulfillment. Finally it short, if the user wants something instantly, the on-demand economy gratifies it.
It can also be defined as the economic activity created by digital marketplaces and the businesses to fulfill consumer demand via immediate access to goods or services.
Before knowing about the business sectors, it is very important to know the growth statistics of the on-demand app economy. It is mandatory to know the past and the future of an industry before stepping into it. In that way, this section will help you to know all about where the future of this industry lies.
Statistics of On-Demand App Economy
- 24 Million people are spending 57.6 Billion Dollars in the on-demand industry.
- Let me spit up the segments from 57.6 Billion Dollars
Online marketplace = $35.5
Transportation = $5.6
Delivery Services = $4.6
Added Services = $8.1
All Other Sectors = $3.8
- 72% of Americans have used some types of on-demand online services.
- Up to 162 Million people in Europe and the united states engage in some form of on-demand services.
- 49% of on-demand application users are young adults.
- 55% of users are male.
- 45% of users have 4 years college degree.
- 54% of the users live in rural areas and 18% of the users live in the city.
- 46% of users who use on-demand applications have an annual income of less than $50,000
- Reports say that 47% of users have an annual income of at least $70,000.
- On-demand startups have constantly raised to 105 billion per quarter from the second half of 2014.
With these facts in mind, let us go deeper to know about the business sectors that are transforming the economy.
Industries that are operating the On-demand App Economy
1. Food Delivery
The finite working hours and the hectic lifestyle have also resulted in the rise of online food delivery and order business. The on-demand market has been introduced and gained attention with the help of this business sector. This lets users order and gets the food instantly. And also it made the restaurant owners get even more customers from various areas of the city.
- Online food ordering has raised the ROI of both the small and big restaurants by 25%.
- The online food delivery business is expected to reach $55 billion by 2022.
- 67% of people said that they would prepare to order food online if the restaurant offers the service.
By knowing the growth of this industry many startups and companies have started stepping into the food delivery marketplace.
This is another important sector which is booming even bigger in this coronavirus pandemic season. It is also behind the growing On-demand app industry.
The worldwide education market is expected to reach USD 319.167 Billion from USD 187.877 billion by 2025 with a CAGR of 9.23%.
India's e-learning market is the second largest after the US which is forecasted to grow by 15.64 percent and exceed $48 billion by 2020.
Going to schools, Universities, Libraries and other educational institutes are the traditional way of the education system. They don’t provide many facilities as the online education system provides. Like anyone missing the classes can not attend, learning more about the topic, and being in a remote area, etc. But the e-learning system solves all these problems. It helps the learners to study anything and anywhere, test knowledge, and clear the doubts instantly, and so on.
3. Health Care
- The On-demand health care services have grown from 4 to 42 between 2010-2014 with a CAGR of 224%.
- Between 2019 to 2023 the health care spending is expected to rise at a CAGR of 5 percent.
Traditional medical system patients are required to get through the hectic process of booking the doctor appointments. And also for doctors, it is very important to maintain the reports very safely without confusion. And pharmacy is also opened for fixed working hours. But after adopting the on-demand industry, the whole story has changed.
Incorporating the on-demand economy in the health care system real-time appointment booking, medicine home delivery, instant medical report sharing, booking for sectors to visit the home place, etc has become a very easy process. This lowered time, energy, and cost the process. So many startups started entering the on-demand health care system.
The landscape of the entertainment industry has also changed the on-demand app economy. Today there are many online entertainment applications from video streaming apps and music streaming platforms.
The OTT usages will grow to $120 billion industry by 2022, and 200 billion by 2024.
At present in 2020 the revenue of the video streaming market has generated up to USD 25,894 million.
The revenue is expected to show an annual growth rate of 4.1%, as a result, the volume of the market will become USD 30.410 million by 2024.
Even in this pandemic season, people are looking for many entertainment platforms. Many people have incorporated into OTT apps instead of the traditional media system. So this is also taking a major part in the growth of the on-demand economy. Not only OTT apps but also online gaming and betting apps like Dream11 also playing a vital role.
5. Online Marketplace
The retail and online marketplace has stepped forward because of the on-demand application economy. It has made shopping a very easy job. It gained attention because of many offers, coupons, etc. This helped to overcome the difficulties faced by the traditional retail industry. Ti helps to overcome difficulties such as higher time consumption, slower processes, availability of lower products, etc. With online applications, it became much easier for placing orders, payments, cheaper rates, etc.
6. Home Services
The home services include laundry services, repair services, handyman services, maid services, and professional services, etc. These services made the professionals get part-time jobs. By knowing the on-demand economy and the industries that are going to flourish it, many entrepreneurs are ready to step into the industry and create a space.
The on-demand home services sector is expected to reach USD 1,574.86 Billion from 2020 to 2024.
An example of Home services is Gojek. It is an on-demand multi-service app that incorporates all the home services too. We all know the reach and success of the Gojek app. Gojek not only has this home services but also delivery service, transportation service, etc.
7. Travel and Tourism
The arrival of Uber, Lyft, etc made a revolution in the transportation industry. In the past, people need to wait for a long time transformation. But now, after the introduction of the on-demand economy, within very few taps and swipes the user can book a ride. Now one can book for a tour, with the room, taxis, etc. in a single package.
The taxi booking industry is expected to reach a CAGR of 10.08% from 2020 to 2025.
The US on-demand transportation market space is expected to increase tremendously by 2025.
8. Online Dating
Not only the way of buying goods made online, but finding a calibrated love also became online in this digital world. Stepping out of the door to find someone to love is just replaced by swiping up and down of the profiles in dating apps. The digital world has made people find their love on online dating apps and the report says $6.4 billion has been reached through the use of Dating applications. Thus, on-demand dating business sectors like Tinder can make you easily collect multi-billion revenue in a short span.
9. Real Estate
The real estate industry is also a part of the growth of the on-demand economy. The agents are stepping forward to the in-demand application industry to find simple solutions and moreover this gives them more benefits like,
Reducing the need for an on-site agent
Very simple to buy/sell a property
Availability of various properties under a single platform
Time & energy efficient
10. Messaging Apps
Messaging apps are a very important part of our daily life. Apps like WhatsApp, Instagram are playing a powerful role in the on-demand economy.
The messaging apps market is about to reach 2.7 number of users in billion by 2027.
Amid coronavirus pandemic the worldwide messaging apps estimates at 1
If you are an entrepreneur looking forward to dive into this on-demand economy, you can enter such business sectors which will give you high revenue and popularity in a short time.
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