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Google’s chosen one: How Dunzo managed to capture the heart of the doubtful consumer in the hyperlocal space
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Dunzo is a local commerce network that is changing the way people shop in India. Dunzo equips MSMEs with the digital resources they need to thrive in an evolving marketplace by implementing its techniques to produce more effective supply chains. Dunzo provides a full suite of commerce (consumables, pet products, health, and wellness), courier (pick up and drop), and computing services to its users (bike taxi). Dunzo aspires to be the logistical layer of Indian cities as it grows. Google, STIC, Moving Capital, 3L, Evolvence, Hana Financial Investment, LGT Lightstone Aspada, and others have invested in Dunzo, with Alteria Capital providing debt.

Because of the evident rise of e-commerce, logistics service providers are faced with an increasing number of small shipments and a difference in their frequency. Simultaneously, innovations and devices are being built to exaggerate logistics service providers’ efficacy and delivered at their preferred business place, which means more rivalry. Via a digital interface, the on-demand hyperlocal distribution business model links the transplanted offline business owners to visitors. With the arrival and growth of hyperlocal sites, displaced offline retailers and service providers have seen a new lease on life for their businesses. Outbound distribution packing is performed both manually and automatically (1). 

Today’s distribution services bear no resemblance to those in the past. When parcel post service first started many years ago, the industry transitioned into the modern era, relying on technical networks to ensure safer and quicker delivery. The market size continues to grow as more people, especially the older generation, participate in online order delivery. They were delivered to their preferred business venue, which means more rivalry. Provided For small orders, most delivery providers charge a higher delivery fee. Consumer perception refers to how a customer feels about a product or service that has been advertised; it is the concept of marketing that requires a consumer’s knowledge of a company’s offers. 

Apps help you save both money and time. They can spend their free time doing things they enjoy, such as recreation and their transportation money on other things. The money factor, user flexibility, delay risk, cut-off time, and customer loyalty are delivery benefits. (2) According to statistics, 17 percent of customers would desert a brand if they have to wait a long time for delivery. When it comes to delivery, not all consumers see speed as the most crucial aspect, so if companies want to keep their customers, ensuring they provide quick deliveries is critical. While brands must have multiple timed delivery options, other factors such as tracking, expense, and convenience also play a role in customer services.

Dunzo is a distribution service provider based in India. In Gurugram, the company also runs a bike taxi service. Kabeer Biswas, along with CO founders Ankur Agarwal, Dalvir Suri, and Mukundjha, formed the company in July 2014. Dunzo began as a Whatsapp community and has since evolved into a hyperlocal, app-based operation. It’s an app that connects you with the nearest delivery partner who can place orders, pick up goods, and deliver them from any store or restaurant in the city. It’s never easy to make purchases or drop off deliveries while you’re busy with work, and you might even forget about it (3). 

Dunzo’s growth story

Dunzo, an on-demand concierge service based in Bengaluru, is a small business. It’s very tiny. Rivals UrbanClap and HouseJoy have millions of dollars in venture capital backing, whereas Dunzo is a lean operation with a $650,000 seed round in March. Dunzo, on the other hand, is off the charts. It is rapidly expanding, with operations doubling roughly every six weeks. It currently processes about 25,000 transactions each month, with anywhere between 60 and 100 tasks running at any given time, thanks to phenomenal word-of-mouth goodwill and a cult-like following. Customers gush about it on social media and enthusiastically recommend it to their mates, the holy grail of consumer loyalty, calculated by the now-fashionable net promoter ranking, which brands like Flipkart lust after.

In 2015, Kabeer Biswas, the former co-founder of Hoppr, a Gurgaon-based hyperlocal deals company acquired by Hike Messenger in 2014, moved to Bengaluru and began running tasks for a WhatsApp user group he developed. Mukund Jha and Ankur Aggarwal ran a similar service called Wingman, and Dalvir Suri, an applications developer, and security expert, soon joined him. All four are co-founders of the company. “This is how we ran the first 5,000 tasks to figure out what was wrong. Biswas, sitting in Dunzo’s Indiranagar office, a two-story independent villa transformed into a workspace largely split between the 20-member operations team and the 14-member tech team, says, “It was a tiny beta.” People are seated in small nooks and balconies on bean bags in this laid-back office. The excitement is contagious, and one member of the operations team has even brought his dog to work (4). 

“We consider chat to be an offline medium,” Biswas says. “It’s asynchronous so that you can submit your request at your speed. We’re very aware of not making phone calls, and it’s built into the app we offer our runners.” Not only is there a comprehensive map layer and a chat interface between the runner and Dunzo’s operations team, which can provide real-time position accuracy inputs to the runner, but runners can only see the customer’s phone number when they are within 250 meters of the client’s address. They can only call for directions if necessary. “Even that is given because addresses in India are often ambiguous and streets are not appropriately numbered.

Dunzo’s technology team is concentrating on using artificial intelligence to simplify processes. Although the operations team currently handles about 70 percent of user requests and bots handle 30 percent, the aim is to achieve a 60-40 split by the end of next month. (5) Of course, the goal is to keep human interaction to a bare minimum and to develop processes that eliminate as much uncertainty as possible from tasks. Dunzo’s tech team, led by co-founders Jha and Aggarwal, is entirely based on this, and artificial intelligence is used to automate processes. While the 20-person operations team currently handles about 70 percent of user requests and bots handle 30 percent, the goal is to get this to a 60-40 split.

“While other on-demand service providers have a bunch of merchants and vendors on their site and then leave it to the customer to know how they want to use these services, our emphasis is different: you tell us what you want to be done, and we’ll figure out how to do it,”

Biswas says.

Dunzo creators, like many others, began by rolling up their sleeves and making deliveries. Biswas had just exited his previous Gurgaon-based business, Hoppr, which Kavin Bharti Mittal’s Hike had bought over, and moved to Bengaluru with the relatively simple aim of starting a text-based concierge service (6). 

Dunzo has also achieved something new by allowing its work to speak for itself. The company’s consumer acquisition costs are small, and the owners have spent no money on marketing and advertisement. Dunzo also needed to be able to do everything to run a broad-based company. “An app that polishes your shoes, for example, will not work. “You can only be competitive in this industry if you run a company that has a high frequency of users and repeats,” Biswas says. Around 40 percent of Dunzo customers are returning customers, with the top 10 percent making requests more than 40 times a month. “To generate sales and benefit, volumes must be huge. Biswas adds, “You have to belong and narrow enough.”

Dunzo has also achieved something new by allowing its work to speak for itself. The company’s consumer acquisition costs are small, and the owners have spent no money on marketing and advertisement. Dunzo also needed to be able to do everything to run a broad-based company.

“An app that polishes your shoes, for example, will not work. “You can only be competitive in this industry if you run a company that has a high frequency of users and repeats,”

Biswas says.

Around 40 percent of Dunzo customers are returning customers, with the top 10 percent making requests more than 40 times a month.

“To generate sales and benefit, volumes must be huge.

Biswas adds,

“You have to belong and narrow enough.”

Dunzo has long been the leader in the provision of online delivery services, and it will continue to do in the future if it makes minor changes. Staff benefit from the delivery service because it saves them time. People also profit from convenience and ease of payment. The control system is an added benefit for consumers. Young people prefer Dunzo’s delivery operation to that of older people. After introducing and developing hyper-local platforms, this research has generated the best service features at each service stage to improve the quality of services, giving local offline retailers and service providers a new lease on life. This result has significant consequences for logistics managers when developing services that incorporate aspects of customer-based voice services.

 

Fundings

They planned to raise twice the amount of capital it has raised so far in the next two years to expand its scope across the country and become a 1 billion dollars revenue firm. The app, which links low-cost couriers with thousands of individual merchants, has enticed Indians with its lightning-fast delivery of groceries and parcels in congested cities. The Bengaluru-based company has raised approximately 140 million dollars to date and plans to raise another 150 million dollars in 2021. He believes the business will grow to two more cities in 2021 to have 20 cities by mid-2023. It has also begun providing 15-minute delivery for a selection of 2,000 popular products (7). 

Dunzo has raised a new round of 40 million dollars in funding from new and existing investors to plan its 2021 plan. This cash comes from a year of solid growth despite the pandemic. The local commerce platform will concentrate on deploying its playbook for sustainable growth in its fastest-growing cities, including Mumbai, Chennai, and Pune, in the coming year. Dunzo has increased its GMV by 2X in the last year and now has an annualized GMV of 100 million dollars. The growth in 2020 will be driven by solid, organic user demand while preserving the overall business’s Gross Margin Profitability.

Dunzo has assisted over 300 communities in eight cities in the last six months, delivering vital goods to users in minutes on average. Its unwavering commitment to mobilizing Indian cities and empowering the merchant ecosystem has made it the country’s “go-to” local commerce product. As cities reopen, rapid growth across consumer segments continues. “Dunzo is assisting small businesses in their digital transformation journey in support of business recovery as merchants go digital,” said Caesar Sengupta, VP, Google. “We’re committed to partnering with India’s creative startups through our India Digitization Fund to create a truly inclusive digital economy that benefits all (8). 

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My passion is Reading and writing. Basically, an optimistic introvert. Always striving to be better. Writing as a passion leads me to become stronger and focused.

Disclaimer: The views, thoughts, and opinions expressed in the article have been curated for our audience and does not warrant a 100% accuracy. All the information mentioned in the article is subject to change according to the changing viewpoints. Feel free to reach us at [email protected] for any change or copyright issues.

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Abraham George
Abraham George
My passion is Reading and writing. Basically, an optimistic introvert. Always striving to be better. Writing as a passion leads me to become stronger and focused.

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