Imagine you moved to a new city or you are back from a vacation to a messy, dusty house, and all you need is some help to set up your home at the earliest or get back on your feet. Convenient, accessible and affordable services at times like these are the bottom line of the rising popularity of on-demand home services not just in UAE, but across the world. The value of the global online on-demand home-services market was $3,456 million in 2021, and as per Data Bridge Market Research, it is expected to double by 2029, registering a CAGR of 8 percent during the forecast period of 2022-2029.
The UAE has one of the highest internet penetration in the region, where an average user spends 8 hours and 35 minutes online per day, according to UAE Internet Statistics 2022. Moreover, the rapidly transforming lifestyle, consumer behaviour and adoption of digital technologies increased the demand for services that people can avail of from the comfort of their homes, saving time and money.
In the UAE, the online home industry, which is still in its nascent stage, has a highly fragmented and competitive ecosystem and spans diverse verticals such as health & wellness, home maintenance & improvement and repair and installation, to name a few. An increase in the number of tech-savvy Gen Z and Millennials in the workforce and disposable income, as well as a notable shift in consumer behaviour around the aspects of convenience and accessibility significantly impact the demand for hassle-free, high-quality and affordable on-demand services.
As per Ken Research’s studies, the on-demand home services sector in the UAE is rising at a CAGR of 9.7 percent from 2021-2026 and a vast majority of those availing these services have an annual household income greater than AED 200,000.
Some of the key factors driving the growth of the on-demand home services sector are – options to schedule appointments at a customer’s convenient time, quality of services offered by highly trained and skilled professionals, the introduction of innovative services enabled with technology to enhance customer experience and increased demand for top-tier personalised services with hygiene and safety at centre stage post the pandemic. For instance, at Urban Company, we have observed a high demand for part-time cleaners, salon services, wellness services such as at-home spas and massages, and RT-PCR home-sample collection services in the UAE.
User persona, customer expectations, needs and preferences are constantly evolving. With user experience being a top priority in today’s day and age, on-demand home service providers are leveraging emerging technologies to satisfy technology-enabled users by offering user-friendly interfaces and hassle-free payment gateways to ensure customer loyalty.
Amidst busy schedules, people prefer to get real-time information and updates and track their service requests. On-demand marketplaces have been successful in providing this. Furthermore, digital channels have a heightened focus on customer relationship management to ensure retention. Easy registration on the website or mobile application, in-app chat options (more than 56 percent of people prefer a message over a call to customer service), ensuring data security of customers and vendors, and leveraging data analytics to understand customer trends and measure progress contribute to the rising popularity of online on-demand home services. Improving app engagement by enabling push notifications and localisation will also improve brand positioning in the competitive sector.
What is exciting though is the future of online on-demand service providers. Their deeper market penetration depends on innovation and constantly improving the customer experience. To gain market share from the offline world (with a lower cost structure than online platforms), online players will have to innovate and disrupt the service experience constantly. With increasing fear of germs and focus on sanitisation across the world, we completely revamped our part-time cleaning service by replacing the traditional mopping process (where a dirty mop reuses dirty water) with a 100 percent hygienic steam mop which steam sanitizes the floor. In short, further penetration of online marketplaces will require players across all online industries to give customers what they have never experienced before.
A study by Locus showcases that 65 percent of consumers will sever ties with a brand over a bad service experience; hence, it is crucial for service providers and vendors to constantly analyse the present scenario and identify opportunities to grow and evolve. The present tech-savvy generation is the largest user of home services, and their busy lifestyle coupled with demand for convenient services will drive the growth of online services in the years ahead.
According to PwC, the on-demand economy, in which home-service providers are a major contributor, is estimated to receive investments of up to $335 billion by 2025, disrupting traditional services and giving way to new products and services.
The shift towards convenient and on-demand services during the pandemic has grown exponentially and is only going to further evolve.
