BHANU PRATAP SINGH CHAUHAN B-22 PRN: 20020441066

STRATEGIC MANAGEMENT
Assignment No.1

DUNZO
-Submitted to: Dr. Vivek Sane

About Dunzo:
Dunzo is an app-based platform offering hyper-local on-demand multi delivery services. Users can
avail errand services and tasks across various categories such as buying, shipping, home repairs,
home services, and more through their platform. It was founded in 2014 by Kabeer Biswas, Ankur
Agarwal, Dalvir Suri and Mukund Jha at Bangalore. The company uses its own fleet of errand
runners or coordinates with local merchants or vendors to deliver the task. Users can pay for the
service either directly to the service provider or through the in-app feature. By charging a small
delivery fee, Dunzo delivers anything and everything to its users. For instance, if you forgot your
laptop in your office, if you forgot some important files at home, Dunzo can get them to you on
demand. Or if you want to buy some groceries from the market, buy a shirt from the store, the
multi-delivery service company will get it for you. Its mobile app is available for iOS and Android
devices.

The Hyperlocal Business Model of Dunzo Delivery Services

Dunzo is an on-demand delivery platform that has transformed the way people shop, transfer
goods, and commute. Talking in business terms, Dunzo is an exemplary model of a two-sided
network. One side of the network, they have customers and, on the other hand, are the merchants.
Dunzo acts as an online marketplace forming a link to connect customers and merchants.
It’s a dynamic, customer-focused delivery service that offers services like picking up groceries,
medicines, food, party supplies, etc. They also offer to deliver parcels from one place to another in
the same city.
Being in a Hyper-Local Delivery (HLD) Business Dunzo leverages a huge target segment. An ideal
customer for Dunzo can range from a 65-year older man looking to get his medicine delivered on
time to a 12-year old schoolboy who wants to get his friend’s homework notebook.
The Dunzo delivery app also has a B2B vertical model called “Dunzo for Business” through which it
offers its services to organizations, companies, and businesses. This option allows companies to
partner with Dunzo and deliver their products to their customers on time and conveniently with
features like live tracking, scheduling deliveries, live chat options, cash on delivery options, etc.
This has grown double in the past year with various NGOs, volunteers, and other organizations
partnering up with Dunzo delivery services to deliver daily essentials to people who were affected
by the COVID-19 crisis in the community. In May 2020 Dunzo partnered with PepsiCo to deliver its
snack brands like Kurkure and Lay’s in Bangalore during the lockdown. It also partnered with digital

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payment platforms like Google Pay to avoid the exchange of cash, enabling contactless delivery. It
recently announced its partnership with Dukaan to help them automate delivery for their clients
under this B2B business model.
Dunzo has grown 40x in the last two years, and on an average, they are operating at two million
monthly orders and growing 10-15 percent month on month. Dunzo’s strategy of building efficiency
across the supply chain and consistently driving an exceptional experience for their customers has
contributed to the growth and journey of Dunzo. At this point Dunzo have one of the fastest
delivery turnaround times in the world, averaging at 28 minutes at under a dollar.
Dunzo’s growing funding
During the start of their journey, founders faced a lot of rejections but in 2016, Dunzo managed to
raise about $650,000 from Blume Ventures, Aspada Ventures, Ranjan Anandan (then MD of Google
India), and Sandipan Chattopadhyay. Next in December 2017, it received about $12.3 million in a
fresh round from Google and the existing investors. This also marked to be Google’s first direct
investment in a start-up ecosystem in India. In 2019, it raised about $45 million in Series D-1 of
funding. The Bengaluru-based firm has so far raised about $140 million to date and aims to tap
investors for roughly another $150 million in 2021.

Dunzo Business Model: Revenue Stream

Dunzo has diversified its revenue stream into five significant streams.

1. Commission Rate: Dunzo charges a specific commission from the partner store per order; this
commission rate can vary from 15% to 30%.

2. Delivery Charge: Delivery charges range from Rs.10 to Rs.60 depending on the distance and the
order value.

3. Surge pricing/ Demand pricing: If the demand in an area increases suddenly, then surge pricing
is applied for that area.

4. Service: Repairs, home service, etc.

Dunzo Business Strategies:

Currently, Dunzo have scaled from 600 merchants in March 2019 to 11,000 merchants in February
2021. 80 percent of all commerce transactions on their platform are from their partnered
merchants, on which they make commissions on every order. Going forward, they are strategizing
to build an unparalleled customer experience that would be irresistible in nature and would help to
solve real use cases in commerce, courier, and commute. Some of the business strategies that Dunzo
focuses on includes:

1. Tactile Experience: Breaking into the market for a new brand such as Dunzo was challenging and
tricky. Though sampling is not a new concept, it has the advantage of giving consumers real
experience with a product. FMCG brands have enabled the product sampling tradition for decades
– whether it’s with a sachet of shampoo or a pack of biscuits. While the traditional approaches in

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sampling, like in-store and distributor-led sampling, are still seen at large, the problem they face is
finding the relevant TG for the product. But Dunzo initially opted for this experience and leveraged
its success through various organic users.

2. Push vs. Pull: Until most recently, various brands have cast a wide net when it comes to sampling,
often focused on certain geographies. However, with smaller brands and niche product companies
coming into play, budgets are tighter, and reputations are at stake. Though the traditional sampling
methods still hold water in some, if not all cases, Dunzo is now able to provide a smarter, faster and
efficient method to do the same. How do they do it? It is a case of Push Vs Pull strategy – while most
traditional methods of sampling use the ‘push strategy’ to make the product available for a wider
set of audience, it doesn’t necessarily reach the relevant TG and results in leakage. While a ‘pull
strategy’ presents the relevant TG with access to the product, resulting in them engaging more with
the brand on a need-based scenario. With data and insights, Dunzo is capable of targeting the right
users for the right brand. This makes the sampling more focused and the result you yield from this
exercise will help you gather valuable insights about your target audience.

3. Data-Driven: For an upcoming Snacks brand, Dunzo was able to map the samplers with their
purchase behaviour to understand where they typically shopped – be it kiranas, chains or gourmet
stores. This helped the brand fine-tune their market strategies, and whether they should focus on
Modern Trade or General Trade. Dunzo was successful in creating a market and channel for the
snack brand through its existing customer base.

4. Distribution & Reach: It’s not just about the right target group – brands must also have good
reach while setting forth for a sampling exercise. With Dunzo, considering how sampling is driven
completely on the app, it is independent of dependencies like logistics and other factors that
sometimes affect such activities, the brand is able to reach a wide set of audiences across different
cities in the county. To throw some light on the matter, let’s talk about a sampling exercise they had
done for a premium chocolate brand. While their distribution was wide, most of the demand was
fulfilled by stores like Godrej Nature’s Basket and Foodhall as compared to any other store in the
city. This helped narrow down on distribution and achieve stronger calls to action in these
locations.

5. On-Demand: On-demand services have flourished so much over the last decade. There are a
countless number of apps that have tapped into this category. Dunzo provided on-demand delivery
of samples that provides instant gratification and yields better results. Some of the FMCG products
like chocolate, ice cream, and other comfort foods work for the user based on mood, and it’s a
fleeting window of opportunity – if the target group has access to the product at that very instant,
it results in a conversation that goes beyond conventional advertising techniques. The world is
getting smaller every day when we put companies like Amazon in perspective; what started with a
7-10 days’ delivery window, has come down to 2 days to 2 hours with the arrival of Prime. While
this window continues to shrink, Dunzo is already making deliveries within 30 minutes.

6. Litmus Test: With users ranging from one end of the spectrum to the other, Dunzo presents itself
as a fine platform to conduct a litmus test on new products entering the market. There’s always
something new coming up every day, and it may be a new source of renewable energy or a new

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beverage in a new bottle. One such sampling was done for Kingfisher Radler, a non-alcoholic malt-
based beverage that was sampled across all cities. It turned out to be the most popular product on
the platform.

7.Direct to Home: Needless to say, convenience is a priceless feeling, and the idea of having the
brand get delivered to the doorstep of target audience, and to draw insights from it, will help brands
leverage huge benefits from the exercise. It is still an alluring pitch for many, and an enticing
opportunity for others; so perhaps it’s true when they say that the doorstep is indeed the best
platform ever built. And needless to say, that Dunzo has already dominated this zone by providing
the best-in-class services.

The Competitive Advantage of Dunzo Delivery Services

Dunzo has successfully created a unique selling point of customer convenience with an integrated
customer-driven marketing strategy which puts its customers at the centre of the business. One of
the biggest competitive advantages they have is that they offer a wide range of services which
include: picking up groceries, medicines, food, pet supplies, gifts, etc. They ensure their customers
that they are always on the move and will get the chores done in time by promoting their brand
through the statement “Save the excuses and time. The better way to get things done, just Dunzo
it”.
Dunzo Daily, the latest offering from Dunzo, harnesses the efficiency of micro-fulfilment centres to
ensure top-selling consumables are always available and can be delivered ultra-fast to users across
the city. Replacing their daily corner shop runs, urban users are adopting quick commerce at scale
and Dunzo is paving the way for this transformation across Indian cities. Dunzo Daily will provide a
selection of the top 1,500 Stock keeping units which would enable a more consistent ordering
experience with faster delivery turnaround times. Dunzo’s Gross Merchandise value is expected to
grow from its current $200M, at a CAGR of 150% over the next two years. Through this model of
growth, Dunzo aims to scale operations to 20 cities by 2023.

Dunzo’s Marketing Strategies

The key goal of Dunzo is to spread knowledge about the multi-usefulness of the app by promoting
through using various means that can be online or offline. But since marketing is done online these
days most of the times, Dunzo uses it online platform successfully by creating identity unique to its
consumers.
 References from Bollywood
To draw people’s interest, Dunzo uses phrases and dialogs from Bollywood. The everyday
notifications are typically interwoven with powerful songs or film titles.
 Meme Marketing
In Memes and Ads, Dunzo is an influential trend-follower. Dunzo easily adapts to the Internet
and its new meme based posts for marketing becomes trending.
 Social Media Marketing
Dunzo’s material is often vivid and coordinated with the key green or black colours of the
logo. The brand creates a strong immersive environment, which instils optimism on small

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screens. As for social media involvement, Instagram, Twitter and Facebook works well for
Dunzo. It strives to spread daily life posts with the aid of their mascots, Harri and Dunya. These
characters, dressed in Dunzo gears, represent the thoughts of a Dunzo-partner in daily
circumstances.

How the pandemic helped to shape Dunzo’s success?

During COVID-19 the hyperlocal delivery service saw a huge surge in demand due to restrictions and
hence, their sales doubled in 2020 due to lockdowns and strict regulations which resulted in people
demanding doorstep deliveries of groceries, medicines, food, etc. In January 2021, it was reported
that it received a 350% increase in the delivery of medicines alone. And other consumables like
groceries, fresh produce, and daily essentials amounted to a 318% increase as of April 2021.
The growth of the Dunzo delivery app during the pandemic is a result of the various strategies
that they adopted to be flexible and ensure the safety of everyone including their employees,
partners, and customers. The delivery service provided safety gear, precautionary checks and even
implemented a new health insurance policy that covers the COVID-related expenses along with a
guaranteed payment for the employees in case they had to be quarantined and were unable to
work. They introduced options like “no contact delivery” and launched a feature that lets the
customers tip their employees to reward them for delivering safely and on time.
They also developed a merchant-first strategy to support the local Kirana shops and help them
compete in this digital marketplace, maximize their audience and grow their business. Prior to the
lockdown last year, they only had 600 businesses on board but by September the number touched
15,000 across its operating cities. They not only helped the merchants get customers, but also
helped with day-to-day tasks like inventory management, stock keeping, delivery etc.
This customer-focused, innovative, and hyperlocal delivery business model has contributed to
Dunzo’s success while fulfilling the needs of people and businesses and also providing aid to the
COVID-affected communities.

Future Strategies of Dunzo

According to various industry reports, India has 600 million monthly commerce transactions, 90
percent of which are still offline. And Dunzo is aiming to digitize the majority of offline transactions
that are happening locally and driving commerce for the micro-economy. By doing so, they want to
enable local, offline merchants to be a part of the digital marketplace and be able to withstand the
pressure from large e-commerce companies as a part of their long term strategy to survive in the
market.
The company continues to adopt new strategies and expansion plans to cater to and reach a wider
target market and audience in India. Currently, the hyperlocal delivery service is aiming to start
operating in 20 cities by mid-2023 by launching 250 micro-fulfilment centres and serving 700-plus
neighbourhoods. This will help in ensuring the deliveries are done in under 20 minutes and increase
its services to a wider audience across the nation. The company continues to grow, evolve, and
transform to meet the needs of people and businesses in India.
It is now seeking to tap the investors to raise about $150 million by the end of this year (2021) to
deploy it in the next year (2022) to build its platform and operations and achieve its expansion
goals in time.

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