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URBAN COMPANY BUSINESS MODEL CASE STUDY

UrbanClap, now known as Urban Company, is one of the fast-expanding startups in India. 

Why run around to different places for different services when everything is available under one roof? 

Yes, UrbanClap is a one-stop solution for all your everyday problems. UrbanClap has the best professionals for all kinds of services from beauticians to counselors. 

It was established in 2014 to directly connect the seeker to the best professional in a particular service. Despite a lot of challenges, the Company strives to provide the best services. Today the CompanyCompany has nearly 50,000 professionals.

Let’s dive into their journey and understand their success story.

UrbanClap Business Model

Launched in October 2014, UrbanClap founded by Abhirj Bhal, Khaitan Varun, and Chandra Raghav has its headquarters in Gurgaon, India. Currently present in India’s eight major cities – New Delhi, Bengaluru, Mumbai, Chennai, Pune, Ahmedabad, Hyderabad, and Kolkata, has more than three billion users with an average of 4,50,000 orders approximately every month.

History of UrbanClap

This startup didn’t just link customers to services but expanded and diversified into many fields and has a strong base in India. This startup’s goals, which is flexible and dynamic, is its main reason for being one of the fast-growing startups. It mainly focuses on bringing the unorganized services under a structured format and delivering it at home’s comfort. Starting with just ten lakhs, the Company grew in leaps and bounds and raised ten crores.

In 2015 the Company spread out its wings and entered into various service offerings. Some of the services are an At-home salon, counselor, yoga, interior design, laundry, plumbing, repair services, and many more. The Company, in its initial years, focused on gaining trust and value. With strategic planning and reaching the right people, they could expand their services and gain recognition among ordinary people.

The Company caters to the needs of consumers and also helps local servicemen to be employed. Before the invention of such a service, the workers’ jobs depended only on word of mouth and intermediaries. If not for this platform, many good professionals and their services wouldn’t have come into the limelight. As the company grew, it raised $185 million by August 2019 from investors: Tiger Global, Steadview Capital, and even Ratan Tata.

Significant components of UrbanClap’s Business Model

Credits: https://oyelabs.com/urbanclap-business-model/

Brand Statement: To provide instant access to reliable certifications and affordable services to the customers.

Vision

  • To satisfy every customer who reaches out to them via their platform.
  • Focuses on recruiting the best professionals for all the services that they provide.
  • To provide access to services without stepping out of one’s home.

Key strengths

  • Well functioning mobile application
  • A super engaging website
  • Usage of Artificial Intelligence and machine learning to make complex tasks simple
  • Presence even in Tier 2 cities
  • Meticulous marketing strategy

Revenue sources

  • Reverse auction
  • Through advertisements that run on the platform
  • Commissions 
  • Leads generated

UrbanClap Business Model- How it Works

In its initial days, it was a search-and-find tool. Today it is a full-fledged website that lists professionals, trains them and connects them to users. Users have the option to book services on the website. 

How to book a service on the app?

  • Install the app
  • Select the service that you are looking for
  • Schedule the service according to your convenient time

The place taken by intermediaries is removed, and the customer is directly linked to the professional, thus cutting down on charges. This also helps with better services.

Two ways of UrbanClap business model:

  1. Fixed Charges services
  2. Services without any fixed charges

Fixed Charged Services

For electrical maintenance and the like, the company gets the money from the app and pays the hired professional later.

Services Without Any Fixed Charges

Through paid lead generations, the CompanyCompany generates money. It is in the professional’s hands to convince the customer to take the service and turn it into cash.

Working Of UrbanClap’s Business Model

Service Receiver’s End

  • Users can find their required service with the listings in the app
  • It allows the user to choose a specific service from a wide range of options, and according to his/her budget.
  • Once the kit is purchased, the customer has to confirm the date and time of the appointment.
  • The advance payment can be made, even COD-Cash On Delivery is available.
  • Once the service is done, the user can review the app and leave a rating based on his/her satisfaction.

Service Provider’s End

  • The app has a dual purpose-one for the individual and one for the specialist.
  • The practitioners in that field provide a notice when a service is requested. Whether they embrace or they reject it.
  • UrbanClap’s business model is structured to allow professionals to evaluate their job obligations and approve or reject service requests accordingly.
  • When the request is approved, alerts are received from the customer and provider to validate the booking.
  • The service providers are fined if any professional medical backs out.

Expansion Of UrbanClap’s Business Model

In the fiscal year of 2019, UrbanClap was successful in raising sales of 116 crores. They haven’t hit break-even which has to compensate for the operating losses incurred: 72 crores. 

UrbanClap expanded its services overseas and launched on-demand services in Dubai, the United Arab Emirates in 2018, and the following year also established a shop in Abu Dhabi. The main reason for launching in UAE is the Indian population. There the prices are 3 or 4 times higher than Indian prices as the users are less price-sensitive. They also expanded to Australia, keeping in mind the same strategy.

In October 2019, the UrbanClap business model cut down on particular services such as wedding photography and event management. It concentrated more on beauty services and also aided the masculine crowd in November 2019.

Revenue Model Of UrbanClap

Two categories 

  1. Booking section and the fixed pricing services
  2. Non-booking or variable pricing services

Commission Model

85% of its revenue comes from subscriptions. Specific commissions are gotten from the servicemen depending on the job. 

Reverse Auction

Turning a potential customer into a user is in the hands of the specialist who generates leads. Five experts will be presented to the user. If the profile of a professional isn’t shown, he gets his credit back.

Lead Generation

One of the best ways to generate income is lead generation. The key source here is commission charges.

Advertisement

Besides all the above-listed ways of earning money, there is another way to make more money: advertisement. Businesses, suppliers, and providers use the UrbanClap platform to display their advertisements in return for the Company’sCompany’s advertisement fees.

Marketing Methods Used By UrbanClap

Basic PPC or Search Ads

Google search ads allow the user to land on their services when they search with appropriate keywords. This results in lead generation.

Social Media Advertisement

Every user is on social media sites, be it Instagram or FaceBook. This makes it easy to reach out to the public through Insta Paid Promotions and FaceBook Ads.

Video Advertisement On Platforms Like YouTube

Through YouTube advertisements and exciting videos, they can attract the public and increase their customer base.

Paid Marketing via Social Media Influencers

With many social media influencers growing, the CompanyCompany collaborates with them as they have many followers. Such collaboration seems to be efficient in bringing users to the platform.

Rebranding And Their Way Forward

UrbanClap recently rebranded itself as the Urban Company with the main motive to have an easy-to-remember name and also to be known as a company that works across demographics. The new brand name implies that this is a company that wants to make urban life simpler. With freelance jobs increasing day by day, the CompanyCompany has launched itself at the right moment. To make it user-friendly, they have also started an option to chat with their service provider.

In recent items, the App is AI-enabled which makes its services even better. 

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