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A New City Delivery Service to Compete with E-Commerce Giants

Dunzo, a startup offering a sophisticated hyperlocal delivery service that can bring almost everything to you within half an hour, is now challenging the food and grocery delivery business and, of course, e-commerce giants by securing $45 million from investors such as Google and Lightbox Ventures. [1]

The four-year-old startup now operates in eight Indian cities, giving the citizens access to a wide variety of products ranging from groceries and medicinal supplies to takeaway meals. Beside the commercial services, Dunzo can also bring you, for example, items you forgot at home. Given that the delivery distance is not too long, the service charge is only $1 and most deliveries are made within 25 minutes. According to a user, Dunzo’s ability to “offer instant gratification” is what makes it stand out from its peers.

E-commerce makes up only three percent of all retail sales in India, but the family-owned stores and local outlets are filled in most of the cities in the country. Dunzo sees its business idea as leveraging small and medium businesses and giving them a chance to compete with major e-commerce giants. The startup intends to use the raised capital to expand its technology infrastructure and develop partnerships with more small merchants.

When it comes to the number of orders, Dunzo remains small compared to actors such as Swiggy and Zomato (food and grocery delivery startups that are also heavily backed). Dunzo processes approximately two million orders per month, growing from 50,000 early last year, whilst its competitors process more than three million orders a day.

 

Personal Comments

The competition among delivery startups in India’s domestic markets is tough. Startups like Dunzo found their ground to play between the well-established businesses: both local small and medium merchants and the delivery services are not new. However, by helping small local business break the physical boundaries to reach more customers, they found business opportunities and changed how goods and people travel within and across the cities. How the growing delivery businesses and e-commerce will impact local traffic is still not clear. It would be interesting to find out what modes of transport Dunzo uses for short-distance deliveries and how the local delivery services influence the residents’ mobility needs.

 

Written by Anne Faxér, RISE Viktoria.

 

Sources

1. 2019-10-04. Google-backed Dunzo raises $45 M to expand its hyperlocal delivery startup in India.