The on-demand economy has transformed the way we access services. With a few taps on our phones, we can order almost anything to our doorstep – from groceries and meals to rides and medical consultations. This new era is driven by technology-enabled on-demand service industries that cater to our need for instant gratification.
On-demand services such as virtual tutoring, fitness apps, ride-hailing services, travel bookings, online retail, real-time package tracking, and food delivery services are now an integral part of our daily lives. The convenience and personalization offered by these industries continue to replace traditional models that rely on in-person interactions and intermediaries.
According to a report, global services on-demand revenues are expected to reach multi-million or billion USD by 2023 or 2030. This raises the burning question, what is driving this phenomenal growth? Is it the four-fold decrease in wait times that on-demand services provide? Or the ability to compare costs and quality at the tap of a button?
To find some of these answers we have compiled this insightful guide which reflects the top service industries that are driving the on-demand economy.
But before we move on to that section lets understand the basics of an On-demand economy?
What is an On-Demand Service?
The evolving needs of customers have necessitated a change in the way in demand services are provided. Previously, scheduled services such as public transportation and cable TV were the norm. However, with advancements in technology and changes in consumer behavior, on-demand app development has emerged as a new model.
On-demand services differ from scheduled services in that they allow customers to fulfill their needs immediately as they arise. The key advantage of on-demand services is the immediacy of need fulfillment, which bridges the gap between demand and supply. Customers can use these in demand services to fulfill their needs anytime, anywhere, regardless of location or time constraints.
To understand it better, consider the example of watching a movie. In the past, a person would have to wait until the movie was released in a nearby theater, purchase a CD when it became available, or wait for it to air on TV.
However, with the emergence of services in demand such as Netflix, Amazon Prime, or Hotstar, customers can access movies at their fingertips.
In short, on-demand services enable customers to meet their needs immediately, making them a convenient and efficient solution for modern lifestyles.
The On-Demand Economy: How Does it Operate?
The on demand service industry works by using technology to connect consumers with service providers. The aim is to provide consumers with the right service provider at the right time.
Consumers can easily use a website or smartphone app to request a service. The app’s algorithm then sends the request to the appropriate service provider, who confirms the request with the consumer.
The service provider then performs the task, and payment is made through the app. The technology company acts as the intermediary in the entire process.
Key Benefits of an On Demand Economy
The on-demand economy offers many benefits, with the real-time fulfillment of customers’ demands being the most useful advantage.
Service on demand enables businesses to efficiently connect with skilled service providers to meet their customers’ needs quickly, cost-effectively, and at scale. This results in reduced overhead costs.
Freelancers have access to more opportunities, and they can work on-demand or hourly, with flexible scheduling. By utilizing technology, businesses can expand their customer base significantly.
List of Top Service Industries Driving the On-Demand Economy
The on demand service industry is expanding, driven by an increasing need for convenience and instant fulfillment.
Here are some of the major service industries encouraging this economic force: –
1.Healthcare Industry
The healthcare industry has been revolutionized by services on-demand, which have helped to improve the on-demand business ecosystem.
In the past, patients had to go through the cumbersome process of booking appointments, while doctors and medical practitioners had to maintain large piles of medical files.
Similarly, people had to visit a pharmacy during working hours to purchase medicines, which made it difficult for them to access healthcare services, especially in emergencies.
However, with the adoption of services on demand, the situation has changed significantly. On-demand healthcare services provide several benefits, such as real-time appointment booking, home delivery of medicines, instant medical data sharing, and the ability to request doctors to visit your location on-demand.
This digitization of the healthcare process has reduced costs, time, and errors associated with the process, while also improving the chances of delivering effective and personalized healthcare services to a wider audience.
According to recent report: –
- The US national healthcare expenditure hit $4.5 trillion in 2022 and is expected to reach $6.2 trillion by 2028.
- The worldwide healthcare industry is expected to reach $665.37 billion by 2028, according to Verified industry Research.
2. Education Industry
Educational services were previously limited to schools, universities, libraries, and other such institutes. This means that individuals who missed a class or wanted to learn about a topic while being in a remote location couldn’t fulfill their needs.
However, the merging of education and high demand services has made it possible to study anything, anytime, and anywhere, test skills, collaborate easily, and much more.
As per the report of Statista: –
- The revenue in the online education industry is expected to reach US$185.20 billion by 2024.
- Revenue is estimated to expand at an annual rate of 8.56% (CAGR 2024-2029), with a projected market volume of US$279.30 billion by 2029.
- The online university education industry is expected to be worth US$120.70 billion by 2024.
3. Finance Industry
The finance (or fintech) sector has also played an essential role in aiding high demand services by providing efficient, quick, and cost-effective solutions for the existing financial infrastructure.
A wider range of flexible APIs is now available, allowing on-demand businesses to integrate payment processes into their applications, enhance payments, ensure transparency and security, and improve the user experience.
According to the Statista report: –
- The total revenue in the Finance market is expected to reach US$1.40 billion in 2022.
- Total revenue is estimated to rise at a 10.96% annual rate (CAGR 2022-2027), with a projected market volume of $2.50 billion by 2027.
4. Tourism and Travel Industry
Travel and tourism is another service industry that is driving the on-demand economy. In the past, users had to wait for cabs during odd hours or on public holidays and face many problems when traveling to remote locations.
However, with the advent of Uber, Lyft, and other similar applications, it has become effortless to get a cab instantly, avoid instances of refusal from traditional taxi drivers, pay the ride fare even after completing a ride etc.
According to recent study: –
- The global taxi market was valued at USD 203.16 billion in 2022 and is expected to increase from USD 229.89 billion in 2023 to USD 618.11 billion by 2031, at a CAGR of 13.16% over the forecast period (2024-2031).
5. Food Delivery Industry
The on-demand economy has resulted in the rise of delivery services due to the finite working hours and need for cash payments in wholesale stores, restaurants, and other eateries.
Services that are in high demand has helped consumers order food items quickly and provided restaurant owners with better opportunities to sell products and enjoy higher ROI.
According to industry experts: –
- Global online food delivery services market was valued at USD 60.18 billion i2022 and is expected to increase from USD 71.43 billion in 2023 to USD 281.52 billion by 2031, with a CAGR of 18.7% over the forecast period (2024-2031).
6. Real Estate Industry
The real estate industry is also contributing to the growth of the on-demand economy.
Real estate agents and mobile app developers are turning to on-demand applications to find solutions to conventional challenges and gain benefits such as lower costs, time-efficiency, a digitized offer-submission process, and ease of buying and selling products through most demanded services.
As per the report of Statista: –
- The global real estate industry is predicted to reach a remarkable $637.80 trillion by 2024.
- Among the numerous segments, Residential Real Estate dominates the industry, with a forecast market volume of $518.90 trillion in the same year.
7. Transporation and Logistics Industry
Logistics is another industry that has witnessed commendable changes in their processes and marketplace after the advent of the on-demand economy.
The logistics sector’s on-demand apps have helped companies mitigate traditional challenges, such as hassle of booking, difficulty in delivery tracking, issues in fleet and warehouse management, etc.
As a result, companies can generate higher revenue and enjoy other benefits by investing in the logistics app development cost and adding to the list of top on-demand logistics players.
According to the precedence research report: –
- The worldwide logistics industry was valued at USD 7.98 trillion in 2022 and is predicted to be worth around USD 18.23 trillion by 2030, with a notable CAGR of 10.7% from 2023 to 2030.
- The North American logistics market was estimated at USD 1,971.87 billion in 2022.
- The Asia Pacific logistics market was assessed at USD 3,480.71 billion in 2022, with a CAGR of 11.9% over the projected period.
8. Entertainment Industry
The on-demand app economy has transformed the entertainment service industry by introducing various video-on-demand applications and music streaming platforms.
These most in demand services and platforms enable users to explore a wide range of tracks, series, and resources from around the world, get instant access to them in real-time, share their own work, pay seamlessly, and much more.
As per some recent findings: –
- The global movies and entertainment market was valued at USD 97.47 billion in 2022 and is expected to increase from USD 104.49 billion in 2023 to USD 182.23 billion by 2031, at a 7.2% CAGR during the forecast period (2024-2031).
9. Retail Industry
The integration of on-demand and retail business models has revolutionized the retail industry. In the past, the retail industry was limited by the challenges of offline operations, which resulted in higher time consumption, slower processes, lower availability of products, and inadequate processes.
However, with the integration of top services in demand and retail business models, customers can now easily place an order and receive it within a shorter time frame, at cheaper rates, and with higher security practices.
According to the research and markets report: –
- The retail market has grown significantly in recent years. It will increase from $28846.57 billion in 2023 to $31310.6 billion in 2024, with a compound annual growth rate (CAGR) of 8.5%.
- The retail industry is likely to increase significantly during the next few years. It will reach $42759.13 billion in 2028, with a compound yearly growth rate (CAGR) of 8.1%.
10. Fitness Industry
On-demand fitness services have emerged as a solution to the problem of incorporating fitness into busy schedules.
With fitness applications and fitness streaming platforms, people no longer need to rely on brick-and-mortar workout studios or gyms. They can access efficient workout content from the comfort of their own homes.
Rather than paying a huge fee and joining a gym where they have to follow a strict schedule, people prefer paying a small fee for fitness apps and working out at their convenience.
The best part is that users can choose highly qualified trainers from anywhere to tutor them, and they don’t have to limit themselves to local trainers.
As per the fortune business insights report: –
- The worldwide health and fitness club market is expected to rise from $112.17 billion in 2023 to $202.78 billion in 2030, at an 8.83% CAGR.
Conclusion: Top Service Industries Driving the On-Demand Economy
The era of instant gratification has arrived, and on-demand service models are rapidly changing customer expectations across various sectors. With just a few taps, we can now access personalized healthcare advice, goods delivery, education, rides, home services, and more, 24/7.
The demand for top service industries is high and shows no signs of slowing down. Entire industries are affected by the on-demand economy, and they either have to adapt to it or face competition from others who do.
With all the facts and statistics mentioned above, it is clear that to keep up with the pace of the business world, SMEs and startups need to switch to on-demand services.
Why Choose Vrinsoft Technology to Build Your On-Demand Business Platform?
If you are willing to launch an on-demand business platform, Vrinsoft Technology Pvt Ltd has the perfect solutions developed by our innovative and competent workforce. We offer customized and innovative features that can be customized to meet your specific requirements, helping you launch a successful on-demand platform.
Our team of experts at Vrinsoft can help both startups and enterprises take advantage of this opportunity by building scalable on-demand platforms that incorporate AI, ML, and emerging technology.
So, are you ready to take the plunge into this data and tech-fueled marketplace Contact us today and request a free consultation!
FAQs on Top 10 Service Industries Driving the On-Demand Economy
Q: What is the on-demand economy?
The on-demand economy is a business model in which people can request that a physical thing, data, or service be delivered immediately, reflecting the notion of instant satisfaction.
Q: What services are in high demand right now?
People will always require assistance with the systems and structures of their houses, making home service businesses an excellent alternative. HVAC, plumbing, and handyman services are among the most popular types of home service businesses.
Q: How can you prepare your business for the on-demand economy?
Getting started with an on-demand app is simple and easy. You just need to follow these steps to prepare for on-demand services: –
- Carefully choose the industry you want to serve.
- Bring your app idea to the table.
- Do a thorough market research and analyze your competitors.
- Decide on the features and functionalities your app will offer.
- Identify the right tech stack and app development team required for your on-demand service app.
- Choose the right business model to make a profit.
- Test and launch your app to the app store.
By following the above steps, you will be well-prepared to enter the on-demand economy.
Q: What is the future of the on-demand economy?
The on-demand service industry has a bright future ahead. The industry has experienced significant growth in recent years. According to a report by Harvard Business, the on-demand economy attracts 22.4 million consumers annually, who spend $57.6 billion on these services. These services include electrical, plumbing, HVAC, pest control, cleaning, landscaping, and more. The global on-demand economy is expected to reach $335 billion by 2025, according to a report by Statista.
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