How Dunzo plans to make Indian cities more convenient to live in than anywhere else

Hyperlocal delivery platform Dunzo is looking to raise “just adequate” capital of $150 million to deploy in the next 15-18 months to achieve one goal of making Indian cities a lot more convenient to stay in than any other global city, shared Kabeer Biswas, Co-founder & CEO, Dunzo.

While speaking at the 12th edition of YourStory’s TechSparks 2021, Asia’s largest startup-tech summit, Kabeer revealed that it will expand its fast grocery delivery service -- Dunzo Daily -- across India to deliver essentials to customers in 15-20 minutes.

“In the next 24 months, we will be rolling out the daily category across the country to 20 cities, and digitise this category for our TAM of 50 million customers. This should bring our GMV to $2-2.5 billion, 10X higher than $200-250 million we have today,” said Kabeer. 

He said that the 'blinders' have been put and the focus is to be able to deliver essentials twice a week consistently with great quality, in time, and at the price points that customers find acceptable. “So that, we can go ahead and change this behaviour for millions of customers in the country,” he added.

Dunzo Daily — already growing at 25 percent week-on-week — is focussed on the user’s buying patterns, and it stocks only those items that are frequently purchased by the users in a geography.

Riding on the back of the organic demand, the Bengaluru-based hyperlocal giant scaled its GMV, which includes the value of products sold on the platform and user delivery fees, by approximately 65 percent in FY21, with more than 90 percent of users signing up on the platform organically in the last year. 

DNA of the company

Online delivery of essential items emerged as a lifesaver during the pandemic, allowing customers to shop conveniently while following the required social distancing guidelines. Dunzo, which had started focussing on the core needs of consumers before the pandemic, could ride on this wave of delivering essentials at the doorstep of consumers after the coronavirus outbreak.

Google-backed Dunzo managed to scale its revenue by 1.6X in FY21 and has reduced cash burn by 43 percent. On this, Kabeer said the growth comes due to the fact that five years of digital adoption across users and merchants happened in the last 18 months, which worked positively for the business along with the company's DNA of building a system that suits its customers the best.

“We have been able to build that DNA of doing whatever is the right thing for the customer. We do and learn whatever is needed for that. We continuously work towards achieving the best and  delivering the best customer experience that anybody in the category is able to offer. We consistently strive for that, and we don't spend days or weeks or months thinking about competition, but we think about what we need to do today to be better for our customers. And that's really the purpose,” said Kabeer.

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He also stressed upon the term ‘adequate funding’. He elaborated that there's a massive opportunity in India at present, which is really fuelling the unfettered ambition in terms of what's really possible. 

“Because technology can impact everyday lives, it can dramatically change consumer behaviour and habits. And that's what we are most excited about. So, fundamentally, the adequate amount of capital is dependent upon what your ambition is today. If that part starts working, you go ahead and find more opportunities in your business, and raise an adequate amount of capital,” said Kabeer.

The third generation of on-demand delivery

Speaking about trends, Kabeer said that Dunzo is riding on the third-generation of on-demand, which needs a lot of iterations, where users can get daily essentials within 15-20 mins at the right price. 

He pointed out that the first generation of on-demand was the ride-sharing apps, and second-generation was food delivery, and now the third had to be some version of daily or weekly essentials getting delivered, which has been ‘dun’ (pun intended) by Dunzo. 

The company is confident to tap its target market or TAM of 50 million customers and deliver them essentials in 15-20 minutes across India in the next 24 months. 

“Most likely Indian cities will be a lot more convenient to stay in than any other global city out there,” said Kabeer.

He added that people who use Dunzo are heavily focussed on getting fresh items delivered to them, and Dunzo is continuously trying to build a robust supply chain to make sure it can  deliver on the expectation of customers every time they buy fresh items.

Evolve

Dunzo was started in 2015 on WhatsApp, where users would type out what they needed done, and Dunzo would get to work. From then to now, Dunzo has evolved into an all-in-one 24X7 delivery ecosystem that fetches and delivers anything and everything within the city, while guaranteeing super-quick deliveries. 

Like Google, Dunzo has now become a verb. The reason for that, according to Kabeer, is that Dunzo has got more information and more data from its customers. 

“Once the customers told us they wanted something, we looked at how we can make that transaction faster? Everything that we do is focussed on how we can go ahead and make sure that the transactions run faster, which means the company is working on all the processes to deliver faster. For instance, when an order is getting placed inside a warehouse, the delivery person knows exactly how many steps it will take to go pick up something. I think an average order is ready to ship in 60 seconds after it is picked. We’d like to be able to bring this down even further,” said Kabeer.

Kabeer added that it started from making ordering experience faster at the top, and over time, it has gone deeper to each of its processes to be dedicated entirely for one purpose -- “to make sure that stuff gets done faster for our customers,” he said.  

He concluded by saying the company is still nowhere close to where it wants to be, and there is a lot of work to do.

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