COVID-19 shaped the success of Dunzo?

 COVID-19 shaped the success of Dunzo?

The dunzo delivery app is the one-stop for all needs regarding delivery. From ordering groceries, medicines, and daily essentials to picking up and delivering home-cooked meals, parcels, etc. it provides all the services.

The hyperlocal delivery model of this company is extremely creative and innovative. A hyperlocal start-up aims to help and support businesses to deliver their products and reach larger groups of customers through a platform similar to a digital marketplace. Dunzo is one of the fastest-growing hyperlocal delivery services today in India with an extremely strong customer-focused approach in its operations.

The company continuously evolves and adopts new strategies to satisfy all the three main stakeholders: the employees, the business partners, and their customers. It has an integrated and customer-focused marketing strategy in place to help serve its purpose. The Bangalore-based company currently offers services in 7 cities of Bangalore, Hyderabad, Pune, Gurgaon, New Delhi, Chennai, and Mumbai.

In today’s post, we will unravel its journey to becoming a successful reality in a locked world due to COVID – 19.  

But first, let us look at the market of these hyperlocal delivery services in India.

Hyperlocal Delivery Services in India

The market for hyperlocal delivery services saw an instant boost in 2020 due to the pandemic and restrictions in India. In simple words, hyperlocal refers to a start-up that helps to deliver goods for local shops and stores to customers. Besides helping to deliver products from stores, some start-ups also allow customers to place orders for generic products like medicines that can be fulfilled from any store. Start-ups like Dunzo also offer to deliver parcels from one part of the city to another to provide a more customer-focused service. Some of the most well-known businesses in the Indian hyperlocal market today include Dunzo for daily requirements, Swiggy and Zomato for food delivery, UrbanClap and HouseJoy for services related to home, etc.

How Kabeer Biswas brought Dunzo to life

The idea of Dunzo delivery services originally came to Kabeer Biswas (the founder) when he was struggling to manage his time to do chores and other tasks while living in Gurgaon. He realized that it was difficult to achieve a work-life balance while living in today’s fast-paced economy and that he needed help to complete his daily to-do list of chores. He then moved to Bangalore after his first start-up Hopper was acquired by Hike. His need to find help with his chores only increased after moving on, which led to him realizing that there may be more people struggling just like him. He identified a market gap of lack of services offering the completion of the day–to–day chores and tasks.

He started Whats-Apping his friends and family asking them what they needed and soon his WhatsApp was flooded with requests from his friends and even strangers who had gotten to know about him through friends. The requests included everything from delivering groceries and medicines to picking up party supplies and decorations. This gave him the idea of the Dunzo delivery services and what started as a small WhatsApp group but quickly rose to popularity and hence, had to be expanded into a full-scale business. Soon he met his other co-founders Dalvir Suri, Mukund Jha, and Ankur Agarwal, and after a lot of struggles, they were successful in getting investments from companies like Blume Ventures, Aspada Ventures, Google, etc., which enabled them to successfully launch their delivery app that aimed to help people with their everyday tasks.

Today, Dunzo delivery is one of the fastest-growing hyperlocal delivery apps in India with operations across 7 cities in India with a workforce of more than 900 people and a continuously increasing demand for their services. It offers a wide range of services to provide convenience and easy delivery to people at a few clicks.

Kabeer realized that the Indian start-ups and businesses are fast growing along with an increase in commercial transactions which are majorly still happening offline. Hence, Dunzo delivery services aims to digitalize these offline transactions and deliveries that take place locally and drive commerce for the micro-economy. This will help in enabling the local, offline merchants to be a partner of the digital market and compete with the large e-commerce companies. He came up with a dynamic hyperlocal business model that sets it apart from its competitors like Swiggy, UrbanClap, BigBasket, Grofers, etc.

The Hyperlocal Business Model of Dunzo Delivery Services

To meet their vision, Dunzo offers various services to its users to provide convenience and make their daily lives simpler by helping to complete their list of daily chores. 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. 

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 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.

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 center 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.

Unlike its competitors like Swiggy, the Dunzo delivery app also offers the option of picking up and dropping packages from one part of the city to another, through which people can send lunchboxes, home-cooked meals, gifts, etc to their friends and family in just a few clicks. 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”.

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, it was able to raise about $40 million from the existing investors to continue its operations. 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 Dunzo delivery app quickly transformed from a convenient app to an essential service app for people as, since March 2021, it has delivered more than 20,000 orders to hospitals. This combined with the delivery of home-cooked meals, medical aid, and oximeters has led to an increase of about 204% in the pick-up and drop orders.

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.

Dunzo’s growing funding

During the start of their journey, Kabeer faced a lot of rejections but in 2016, Dunzo managed to raise about $650,000 from Blume Ventures, Aspada Ventures, Ranjan Anandan (Md of Google India), and Sandipan Chattopaday. 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. And, last year in 2020 they received total funding of $40 million from its existing investors which they plan to use to expand its operations in 2021 as confirmed in a statement. The total funding today, adds up to about $119.1 million with a valuation of approximately $200 million.

Future plans

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-fulfillment centers and serving 700-plus neighborhoods. 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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1 Comment

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