How Does Dunzo Make Money and What is it Business Model

For its all-inclusive offerings, tomorrow’s internet delivery startup is today’s most chosen app by millions of people in India. You guessed correctly. We’re talking about Dunzo, a Bangalore-based business that received funding from Google. Entrepreneurs all around the world are looking for inspiration from the Dunzo delivery app business model in order to create their own.

Dunzo’s success story demonstrates that if you are motivated to solve your people’s concerns, you will succeed. People would not have known before Dunzo; They would be able to run all of their errands using their smartphones. Startups ranging from grocery to food delivery were entering the on-demand delivery sector. While many vital chores remain, people must manage their time to do them.

Did you know that?

“Do, over, and finished,” says Dunzo.

Kabeer Biswas was a clever man who spotted more than just such errands and devised the Dunzo business model. We expand on the complete narrative in the piece, including how the Dunzo delivery app works, its revenue strategy, and more. First, let us focus on Dunzo’s insights.

Courtesy: Dunzo

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Dunzo’s Bio

  • Private type of business
  • Founded in July of 2014
  • Indiranagar, Bengaluru, Karnataka, India, is the headquarters.
  • Bangalore, Mumbai, Gurgaon, Delhi, Hyderabad, Pune, Chennai, and Jaipur are among the cities served.
  • Ankur Agarwal, Kabeer Biswas, Dalvir Suri, and Mukund Jha are the founders.
  • Abhishek Venkateshwara is the chairman.
  • Online Consumer Services is an industry.
  • Employees: over 900
  • Online restaurant discovery, Packages, Online Ordering, Pick up and drop, Bike Taxi, Grocery Delivery,
  • Medicine Delivery, Laundry Delivery, and Local Couriers are among the services provided.
  • Monthly Orders: 10 lakh App Downloads: +5,000,000
  • Operational 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 dunzo.com.
  • Windows, Android, and iOS native clients

The Dunzo Saga

Kabeer Biswas, Dunzo’s creator, is a computer science engineer. He lived in Gurgaon and had a hectic schedule. Even after living in a modern home, he found it difficult to find time to conduct errands and do domestic chores. The circumstance frequently made him ponder why there wasn’t a way for him to find time for his responsibilities.

After his first startup, Hoppr, was acquired by Hike, he had time to reflect on his next steps. He relocated to Bangalore, where he needed to find help with his tasks once more. This time, he had the impression that there must be other people juggling their schedules like him.

As a result, he decided to create a firm to assist people in their daily to-do lists. Initially, he began WhatsApping and errands for his friends. This is how he put his Dunzo company idea to the test. As word spread about this magical WhatsApp number for getting all of their errands done, more and more individuals became aware of it.

The word traveled quickly, and the number of requests skyrocketed. In June 2015, he hired a few employees on a part-time basis from an NGO to do 70 deliveries in a day. Due to increased demand, he converted Dunzo from a WhatsApp-based service to an app in 2016. Meanwhile, other co-founders and investors jumped in, resulting in the Dunzo app’s huge success.

The moral of the story is that you must put yourself in your consumers’ shoes and feel their pain in order to build a more customer-centric product/service. Success will come to you naturally.

Dunzo’s Business Model for Hyperlocal DeliveryDunzo operates on a hyperlocal delivery business strategy via a website and mobile apps. It uses a data-driven technique to match delivery employees to the nearest user’s request. You can rely on Dunzo:

  • If you need something at work that you left at home;
  • If you want to buy a dress from a mall but are unable to go there and buy it;
  • If you have a craving for pizza yet the cost of home delivery from the outlet is prohibitively pricey
  • If you need to photocopy certain documents to send to your boss;
  • If getting the dry-cleaning is critical for the next meeting in the morning, but you’re too busy;

The list continues on because there isn’t much Dunzo can’t check off your to-do list. They’re an excellent audience for Dunzo, whether it’s a 12-year-old desiring his friend’s notepad or a 65-year-old having medicines delivered to their home. Its merchant partners include restaurants, apparel stores, pharmacies, and other miscellaneous retailers.

Dunzo has also launched “Dunzo Bike Taxi” to provide a quick and inexpensive way to go about the city. In terms of user experience, Dunzo employs Artificial Intelligence to provide maximum customer happiness and a smooth experience.

Did you know that?

Dunzo’s merchant base has grown from 600 in March 2019 to 11,000 in February 2021.
How does Dunzo function?

  • Users can either install the Dunzo App or order/request through a 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 staff deliver the order or complete the task in no more than 60 minutes.
  • Dunzo will charge a little fee for the delivery service.
  • Users can pay with Dunzo cash or any other method offered on the app.

Dunzo’s unique selling point

Dunzo Business Model

technolab.com

“Owning our logistics and supply chain was the turning point for us,” Mukund Jha explains. Unlike other on-demand meal delivery platforms, Dunzo completely owns the delivery layer. In contrast, many platforms to the order-only paradigm, leaving delivery to their merchants or customers. Dunzo hires delivery drivers and assumes all responsibility for delivering the order or delicately the task.

Dunzo – Startup Obstacles

Not a single startup succeeds without hitches and hurdles, and Dunzo was no exception. At the outset, the startup had to deal with funding concerns, an inefficient delivery system caused by staff taking longer to accomplish errands, difficulties managing a website and mobile applications, and financial losses.

Dunzo – Opponents

As the market grows, the startup acquires traction, competitors arise, and the market becomes more competitive. Dunzo currently competes in the market with well-known brands such as Swiggy and Grofers.
Revenue Stream in the Dunzo Business Model

Did you know that?

In FY19, Dunzo recorded total revenue of INR 3.5 crores. INR 76 lakhs came from “revenue from operations,” with the remaining INR. 2.7 crores coming from “other income.”

Dunzo’s success can be attributed to the fact that it has divided its revenue into five distinct revenue sources.

  • Dunzo receives money via delivery fees (which can range between $10 and $60).
  • A predetermined percentage commission from the partner’s store.
  • And if demand in a certain location suddenly spikes, they charge more money; this is also known as Surge Pricing or Demand Pricing.
  • The fees for services such as pick-up and drop-off, house repairs, and acquiring something from somewhere vary as well.

Here’s how its workflow is:

The user installs the app.
If a user needs an item to be parceled from one location to another inside the same city, the user can book it through the App.
Dunzo personnel will come to the pick-up place and deliver the item to the appropriate destination. All of this is completed in a short period of time, usually within hours.
Dunzo will charge a little fee for the delivery service.

How Does Dunzo Make Money?

This is how Dunzo makes money.

1. Delivery fee – Dunzo charges a minor fee for each delivery. The delivery fee can range between Rs. 10 and Rs. 60, depending on the total value of the order to be delivered and the distance to be traveled.

2. Commissions — For each order received, Dunzo levies a commission fee ranging from 15% to 30% to the tie-up sellers.

3. Services provided – Home services, maintenance chores, 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 – Apart from 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 request. Here are some examples of such various requests:

Photograph my son’s school assignment.
Take a quick video of my house as it is being built to make sure that everything is going smoothly.
Please bring me my white shirt from home.
So this is Dunzo’s business model. If you want to create an app like Dunzo, now is the time. On-demand hyperlocal delivery business models are gaining traction.

In the near future…

Dunzo, a Google-backed delivery startup, aspires to become a Unicorn and generate $1 billion in revenue. This year, they may add two new cities to their target list. Their target is to reach 20 urban areas by the middle of 2023. And there’s more. Dunzo has recently begun to offer 15-minute deliveries for roughly 2,000 popular items.

So, what is the question?

Do you operate in the on-demand delivery industry and target numerous domains such as Food, Grocery, and Courier delivery? If so, it’s past time to get up and level up because market rivalry is steadily expanding.

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