For its all-inclusive offerings, the internet delivery startup of tomorrow is today the most chosen app by millions in India. You guessed right. We are talking about Dunzo, a Bangalore based business that has received funding from Google. Entrepreneurs around the world are looking for inspiration from the Dunzo delivery app business model to create their own.
Dunzo’s success story shows that if you are motivated to address the concerns of your people, you will be successful. People may not have known before Dunzo; They will be able to run all their errands using their smartphone. Startups ranging from grocery to food delivery were entering the on-demand delivery sector. While there are many important tasks left, people must manage their time to do them.
Did you know this?
Dunzo says, “Do, finish and finish.”
Kabir Biswas was a shrewd man who saw more than just such works and created the Dunzo business model. We detail the full story in this section, including how the Dunzo delivery app works, its revenue strategy, and more. First, let’s take a look at Dunzo’s insights.
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- private business
- Established in July of 2014
- Indiranagar, Bangalore, Karnataka, India, is the headquarters.
- Bangalore, Mumbai, Gurgaon, Delhi, Hyderabad, Pune, Chennai and Jaipur are among the cities served.
- Its founders are Ankur Agarwal, Kabir Vishwas, Dalveer Suri and Mukund Jha.
- Abhishek Venkateshwara is the chairman.
- Online consumer services is an industry.
- Employee: Over 900
- Online Restaurant Search, Packages, Online Ordering, Pickup & Drop, Bike Taxi, Grocery Delivery,
- Services provided include Medicine Delivery, Laundry Delivery and Local Courier.
- Monthly Orders: 10 Lakh App Downloads: +5,000,000
- Operating Revenue: Rs 27.5 crore (FY20)
- The total amount of funding is $950 million.
- Dunzo Digital Private Limited is the parent company, and its website is danzo.com.
- Windows, Android and iOS Native Client
Kabir Biswas, the creator of Dunzo, is a computer science engineer. He lived in Gurgaon and had a busy schedule. Even after living in a modern home, she found it difficult to find time to work and do household chores. The circumstance made him think again and again as to why there was no way for him to find time for his responsibilities.
After his first startup, Hopper, was acquired by Hike, he had time to consider his next steps. He shifted to Bangalore, where he once again needed help with his tasks. This time, he got the impression that others like him must be messing with their schedules.
As a result, he decided to form a firm to help people complete their daily to-do lists. Initially, he started doing WhatsApp and working for his friends. This is how he tested his Dunzo company idea. As soon as the talk spread about this magical WhatsApp number completing all his tasks, more and more people came to know about it.
Word quickly went by, and the number of requests skyrocketed. In June 2015, he hired some employees on a part-time basis from an NGO to do 70 deliveries a day. Due to increasing demand, they switched Dunzo from a WhatsApp-based service to an app in 2016. Meanwhile, other co-founders and investors jumped in, resulting in the huge success of the Dunzo app.
The moral of the story is that you must put yourself in the place of your consumers and feel their pain in order to create a more customer-centric product/service. Success will come naturally to you.
Dunzo’s Business Model for Hyperlocal Delivery Dunzo works on the Hyperlocal Delivery business strategy through a website and mobile app. It uses data-driven technology to match delivery staff to the nearest user request. You can count on Dunzo:
- If you need something at work that you may have left at home;
- If you want to buy a dress from a mall but are not able to go there and buy it;
- If you are craving for pizza, yet the cost of home delivery from the outlet is exorbitant
- If you need photocopies of certain documents to send to your boss;
- If dry-cleaning is important for your next morning meeting, but you’re too busy;
The list goes on because too many Dunzo can’t check off your to-do list. They’re an excellent audience for Dunzo, whether it’s a 12-year-old wishing to have his friend’s notepad or a 65-year-old having drugs delivered to their home. Its merchant partners include restaurants, apparel stores, pharmacies and other miscellaneous retailers.
Did you know this?
Dunzo’s merchant base has grown from 600 in March 2019 to 11,000 in February 2021.
How does Dunzo work?
- Users can either install the Dunzo app or place an order/request through the website.
- A user must sign up, select a location, and then select a category to order from a Dunzo partner or enter pick and drop addresses for other services in their city.
- Dunzo employees deliver orders or complete tasks in no more than 60 minutes.
- Dunzo will charge a little for the delivery service.
- Users can pay by Dunzo Cash or any other method provided on the App.
Dunzo’s Unique Selling Point
“Owning our logistics and supply chain was the turning point for us,” explains Mukund Jha. Unlike other on-demand food delivery platforms, Dunzo completely owns the delivery layer. In contrast, many platforms follow an order-only paradigm, allowing delivery to their merchants or customers. Dunzo hires delivery drivers and assumes all responsibility for placing orders or completing tasks delicately.
Dunzo – Startup Constraints
No startup succeeds without a hitch and Dunzo was no exception. Initially, the startup had to deal with funding concerns, an inefficient delivery system that caused employees to take longer to complete tasks, difficulty managing a website and mobile application, and financial losses.
Dunzo – Opponents
As the market grows, the startup gains traction, competitors arise, and the market becomes more competitive. Dunzo currently competes in the market with well-known brands like Swiggy and Grofers.
Revenue Stream in Dunzo Business Model
Did you know this?
In FY19, Dunzo recorded a total revenue of INR 3.5 crores. INR 76 lakhs came from “Revenue from Operations” with the remaining INR. 2.7 crore is coming from “other income”.
Dunzo’s success can be attributed to the fact that it has divided its revenue into five different revenue sources.
- Dunzo gets the money through delivery fees (which can range between $10 and $60).
- A predetermined percentage commission from partner stores.
- And if the demand at a certain place suddenly increases, they charge more money; It is also known as surge pricing or demand pricing.
- Services such as pick-up and drop-off, home repairs, and out-of-the-box services also have varying fees.
Here’s how its workflow is:
User installs the app.
If a user needs to parcel an item from one place to another within the same city, the user can book it through the app.
Dunzo personnel will arrive at the pick-up location and deliver the item to the appropriate destination. All this is accomplished in a short amount of time, usually within hours.
Dunzo will charge a little for the delivery service.
How does Dunzo make money?
This is how Dunzo makes money.
1. Delivery Fee – Dunzo charges a nominal fee for each delivery. Delivery charges can be between Rs. 10 and Rs. 60, depending on the total value of the order to be delivered and the distance traveled.
2. Commission – For every order received, Dunzo charges a commission fee of 15% to 30% from tie-up sellers.
3. Services Provided – Household services, maintenance works, and so on.
4. Surge Pricing – Surge pricing is another source of revenue for Dunzo. When there is an increase in demand, the price rises to meet the increasing demand.
Other Subcategories – In addition to the various services it provides, such as food delivery, grocery delivery and other services, there is also a category within the firm that handles all other types of requests, known as #kuchbhi requests goes. Here are some examples of such miscellaneous requests:
Take a picture of my son’s school assignment.
Take a quick video of my house as it is being built to confirm that everything is running smoothly.
Please bring me my white shirt from home.
So this is Dunzo’s business model. If you want to build an app like Dunzo, now is the time. On-demand hyperlocal delivery business models are gaining traction.
In the near future…
Google-backed delivery startup Dunzo aspires to become a unicorn and generate $1 billion in revenue. This year, they may add two new cities to their target list. They aim to reach 20 urban areas by the middle of 2023. There is so much more. Dunzo recently started offering 15-minute delivery for nearly 2,000 popular items.
So, what is the question?
Do you work in the on-demand delivery industry and target multiple domains such as food, grocery and courier delivery? If so, it is time to rise and rise as the market rivalry continues to grow.