Just Dunzo it! – What and Why?
Every business runs through a variety of functions. Fast forward to the pandemic era, the tasks that used to enable companies to run are now a business in itself!
Take the example of a simple e-commerce function of delivery. Rounding with the new normal, it is one of the prime factors that has disrupted consumer behavior, patterns, and preferences. In a world that is running on-demand, the consumption patterns have been erratic and demanding.
Quick Commerce is the disruption that has enabled the e-commerce boost through last-mile delivery in a matter of minutes. The Quick Commerce market in India will reach around $5 billion by 2025 accounted for its 10-15x growth in the next five years. No wonder that delivery under 10/30/45 minutes of essentials, groceries, etc., at your doorstep isn’t a new concept to you!
Thus, it isn’t surprising why the scope and future of the Quick Commerce industry are interesting to explore. It is even more intriguing to know about the Indian Quick Commerce model of Dunzo that preaches to “Save the excuses and time. The better way to get things done, just Dunzo it!”
What is Dunzo
Backed by Google, Dunzo is a hyper-local delivery service in eight cities that dominate the market- Bengaluru, Delhi, Gurugram, Pune, Chennai, Jaipur, Mumbai, and Hyderabad. It started as a Whatsapp group service that relied on the idea of unfinished weekly chores and errands. The transformation of the WhatsApp service of 2015 into a most likely 800 mn dollar business of 2021 happened with the exemplary efforts of the Co-Founders – Ankur Aggarwal, Dalvir Suri, Kabeer Biswas, and Mukund Jha.
“If you were to think of local search in a world where everything actually gets delivered to you, Dunzo would be the product that one builds. We are building a highly available logistics layer in the city that allows for everything that a user thinks of to actually be in their hands. The deep product thinking at Google has always made the conversation with them much more valuable,”Biswas
The Dunzo app gets food, groceries, medicine, pet Supplies, fruits & vegetables, meat & fish, and health products. It can even deliver gifts and send Packages from one end of the city to the other. The range goes from local Kirana stores to brands, grocery shopping to a forgotten charger. It has even started a bike taxi service in Gurgaon.
It connects the user with the nearest delivery partner using artificial intelligence algorithms.
The Dunzo’s keep moving things attitude is simple: Business Model of Hyper-Local Delivery. It charges a small fee for delivery which ranges from Rs. 10 to Rs. 60.
Until 2019, Dunzo spent zero dollars on marketing expenses and centralized a customer-centric approach by creating a cult for its services. Reimagining its model as a verb for the services it does, Dunzo has come a long way in integrating several aspects of the hyper-local business model.
The dimensions to the hyper-local delivery business model of Dunzo
Some of the competitors in the hyper-local market in India are Swiggy, Grofers, Big Basket, Zepto, Jhutpat, Meratask, and Jugnoo.
Every model has unique selling points and categorizations. The intriguing part of Quick Commerce war giants and startups is beyond the 10-20 minute delivery. It is mainly focused on enabling and stabilizing the process of such hyperlocal delivery in a market in a nascent stage.
Dunzo bagged a 64% jump in Gross Merchandise Value as demand increased by changing consumer behavior across grocery, medicine, food, and other categories. It is a potential leader in the space as it combines various business models into one comprehensive ecosystem that makes it more than just a minutes delivery app.
It is geography and the time factor that dictates the success of the hyperlocal marketplace. The model has a short delivery time covering an extensive area and diverse categories.
Dunzo is building a hyperlocal marketplace using Dunzo for business that drives on-demand and hyper-local deliveries. It currently has over 10,000 merchants that increased revenues by 150% on average. Fast-moving consumer goods are the most grossing segment in such a model. It has also led Dunzo to be a shopping-focused and inventory-led business model leading to an average order value jump to Rs 450.
Dunzo also collaborated with LeadSquared to create an offering that is a merchant-first product. It integrated a digital marketplace toolkit for offline retailers, including inventory management, e-commerce logistics, and demand prediction. It is then sold on the app and fulfilled by the delivery partners by a hyper-local delivery mechanism.
It charges a commission from the partner store per order from 15% to 30%.
Dark stores are fragmented micro-warehouses located closer to the point of delivery which stores 1,500-2,000 SKUs. While contemplating full-scale operations and 10-minute delivery restrictions, the hyperlocal delivery will be facilitating hyper convenience to customers to prioritize time and premium services.
Gone are the days when just businesses utilized outsourcing. Dunzo has enabled people to outsource their errands of shopping and pickups. It is a network that provides task fulfillment and concierge services in a hyper-local space. In 2016, Dunzo had 25,000 transactions in a month, followed by fascination to experience their benefits.
The services are done under this category –
- Video recording of a house under construction.
- Picturing school project
- Picking charger from home
It closed three verticals—home services, secretarial jobs such as booking movie tickets or placing an order on an eCommerce site, and government tasks because of low potential in the segment.
Just because it is traffic for us, it does not mean that we are not looking at five years hence. Most of them have low frequencies. The one big learning is that becoming a fire hose to others is not a business, at least not in the long term.Biswas
The miscellaneous or ‘Others’ category features in the “#kuchhbhi” requests as revenue.
It is the pricing that runs on the mechanics of demand and supply. In the phase of intense demand and limited supply of delivery partners, surge pricing algorithms determine which user can avail of the services. Classically led by Uber, Dunzo also uses the surge pricing method to match delivery partners with users.
The future of Dun it!
Dunzo is thriving to be the hyperlocal Amazon and the most prominent e-commerce portal in India.
It plans to onboard sellers across niche spaces and neighborhoods across 25 cities in India and acquires the profitable status. Using a hyperlocal delivery business model, Dunzo also wants to surf international waters in dense locations such as Singapore, Dhaka, and New York. It is reimagining the concept of a 15-minute city by making services and products more accessible and available.
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