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Dunzo - Analysis of Business Model

An on-demand delivery service called Dunzo launched in Bangalore, India in July 2014. It was founded by Kabeer Biswas along with three co-founders. Dunzo offers delivery of anything as needed with minimal fees. It generates revenue from commission fees from partner stores, delivery fees from customers, and surge pricing during high demand times. It also offers miscellaneous delivery services like taking photos or videos. The business is facing challenges with profitability due to low average order values. Proposed solutions to address this include increasing commonly ordered item selections, bulk ordering discounts, and bundling customer orders.

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Aditya Kumar
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85 views5 pages

Dunzo - Analysis of Business Model

An on-demand delivery service called Dunzo launched in Bangalore, India in July 2014. It was founded by Kabeer Biswas along with three co-founders. Dunzo offers delivery of anything as needed with minimal fees. It generates revenue from commission fees from partner stores, delivery fees from customers, and surge pricing during high demand times. It also offers miscellaneous delivery services like taking photos or videos. The business is facing challenges with profitability due to low average order values. Proposed solutions to address this include increasing commonly ordered item selections, bulk ordering discounts, and bundling customer orders.

Uploaded by

Aditya Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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 A hyper-local on-demand delivery service in India

 July 8th, 2014.


Bangalore

 Kabeer Biswas along with


co-founders Ankur Agarwal,
Dalvir Suri and Mukund Jha

 It offers minimal delivery fees and delivers anything and everything as needed.
Business Model & Revenue Model
 Commission Rate– Dunzo charges a specific commission from the
 Partner store per order; this commission rate can vary from 15% to 30%.
 Delivery Charge– Delivery charges range from Rs. 10 to Rs. 60 depending on the distance and the
order value.
 Surge pricing/ Demand pricing– If the demand in an area increases suddenly, then surge pricing is
applied for that area.
 Service– Repairs, home service, etc.
 Miscellaneous Category– In the words of Biswas, founder of Dunzo, this is called #kuchbhi
request. The charge of these categories is decided on the task description. Here is some example of
#kuchbhi request:
1. Take a 20-second video of my house under construction, to ensure the work is going well.
2. Take a picture of my daughter’s school project.
3. Get me my jacket from home.
Market Positioning & Competitive Landscape
Root Cause Of Decline

 Profitability is at the heart of the problem.


 Average order value is one important lever to pull the profitability up.
 Hyperlocal model is the game of making every order profitable. This makes it very important to
look at unit economics of the business.

 Three ways to look at the problem of profitability-


i. Increase value of cart everytime user checkout (AOV)
ii. Decrease the freq of orders per user keeping the spendings same by letting users aggregate
their orders
iii. Decrease the cost per order by buying some time from users to collect other orders in that
area Orders per hour.
Proposed Actionable Solutions
 Increasing SKUs for commonly used basic items like wheat & rice etc, increasing their
availability and keeping the various qualities & price points similar to local shops.
 Helping users not to forget commonly bought items by creating a flow of purchase
for weekly/monthly stock up.
 Motivate users to bulk order by keeping volume discounts (Like flat Rs.50 above
Rs.800, Rs. 100 above Rs.1200 etc)
 Motivating & helping users to club their orders wherever possible by prompting
them to either choose
i. to add more daily essential items to increase order value above a threshold to
make it a free delivery or
ii. let the order get delivered next day with other orders in the area.(Solution for only
profitability)

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