Blog

How Does Dunzo Work – Business & Revenue Model Explained

Dunzo Business Model
On-Demand Delivery / On-demand Economy

How Does Dunzo Work – Business & Revenue Model Explained

Introduction

A multi-services app, also known as Super app is an application that offers multiple services in a single module. Some popular examples of multi-services apps are Dunzo, Gojek, Grab, etc.

The business strategy and ideation behind multi-services apps is profitable. In this article, we will discuss a multi-services app, Dunzo, how it works, its business model, and how it generates revenue.

What is Dunzo

Dunzo is a hyper-local on-demand multi delivery service app. 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. Let’s look at some stats and facts related to it-

Dunzo – Key Highlights

App NameDunzo
CategoryOnline Consumer Services
FoundedJuly 2014
FoundersKabeer Biswas, Mukund Jha, Ankur Agarwal and Dalvir Suri
HeadquarterBengaluru, India
Parent OrganizationDunzo Digital Private Limited
Valuation$245 million
App Downloads5,000,000+

It’s interesting to note that the company does not own any of these restaurants, shops or stores. Its business model is focused on delivery. We will discuss its business and revenue model in detail later in this article.

Dunzo’s Growth Timeline

The table below shows Dunzo’s funding details

DateAmountInvestors
November 2016$1.18 MillionAspada Investment
December 2017$12.3 MillionGoogle, Blume Ventures, Aspada   Investment
November 2018$70 MillionAlteria Capital
February 2019$3.1 MillionBlume Ventures, Lakshmi Narayanan,   Raintree Family Office, Monika Garware Modi
February 2019$420k
April 2019$684.2 MillionGoogle, Blume Ventures, Alteria   Capital, Patni Wealth Advisors
May 2019$50 MillionKalpavriksh Fund
June 2019$29.9 MillionBelltower Fund Group Ltd
August 2019$2.8 MillionAlteria Capital
October 2019$45 MillionLightbox Ventures, 3L Capital,   STIC Investment, STIC Ventures and Google
February 2020$11 MillionAlteria Capital
September 2020$28 MillionGoogle, Lightstone Fund

Tip: Those who want to build a similar app, can benefit by providing multiple services that their target audience will make use of in their daily routine.

How dunzo works

Dunzo’s Business Model

Dunzo also has tie-ups with numerous shops, restaurants, clothing stores, and some general stores too. The company is providing its on-demand delivery services in cities like Delhi, Noida, Pune,  Mumbai, Bengaluru, Hyderabad and Chennai. The app has turned out to be of great help and convenience to users, who cannot go out themselves for some reason or those who just don’t want to do shopping and pick up things on their own, and want to shop some products or send over.

Users have the options to order anything they like which is available in a store and Dunzo delivery partners will deliver them the products ordered from the app. Here are some examples that you can order using the app – groceries, food, cigarettes, pan medicines and more.

Just to give a complete glimpse of what you can use the app for, let’s have another example, Users can use the delivery system as a personal delivery option as well in the same city. For instance, if you need to send a gift on a special occasion to a friend, you can make it happen through Dunzo delivery.

Here’s the workflow

  • User installs the App.
  • If a user needs any item to be parcelled from one place to another location within the same city , the user can book it using the App.
  • Dunzo people will come and pick the item from the pick up address and deliver the item to the required destination. All this is done in a quick span of time, generally within hours.
  • For the delivery service, Dunzo will charge a small fee.

Dunzo has a mobile app and a website using which It provides concierge service on-demand to its users in the hyperlocal market. The app functions through a data-driven platform using which its delivery guy is connected to the user nearby. Delivery person’s location and activity can be tracked throughout the journey.

Users are given the option to chat with the delivery person in case there are any purchases to be made. Using this option, the user can share the required images of the product needed, and share information accordingly. Once the order is delivered, the user can make the payment through the app or there is also an option of Dunzo cash. To provide its customer base a smooth and good user experience, the company makes use of AI in its solution.

How Does Dunzo Generate Revenue?

This is how Dunzo generates revenue

1. Delivery fee – Dunzo charges a small fee for each delivery it completes. The delivery charge can be anywhere Rs. 10 to Rs. 60 depending the total value of the order to be delivered and the distance to be covered.

2. Commissions – Per order received, Dunzo charges a commission rate, ranging from 15 percent to 30 percent, from the tie up vendors.

3. Services offered – Home services, repair tasks etc.

4. Surge pricing – Dunzo generates its revenue from surge price as well. When there is a spike in demand, the price increases as per the increased demands.

5. Other Categories – Apart from the multiple services, like food delivery, grocery delivery and other services it offers, there is also a category which covers all other kinds of requests, known as #kuchbhi request within the company. Here are some examples of such miscellaneous requests-

  • Take a picture of my son’s school project.
  • Take a short video of my house under construction, to ensure the work is going well.
  • Get me my white shirt from home.

So, this is the business model for Dunzo. If you want to build an app like Dunzo, this is a good time for you. On-demand hyperlocal delivery business models are gaining momentum and popularity. Did we mention that Dunzo is the first Indian startup to get direct funding from the search engine giant Google. What are you waiting for? Start creating your own app today! We will help you make your multi-service delivery app.

See also:

How to create a Super App Like Gojek

FAQs

What are some apps similar to Dunzo?

There are several apps like Dunzo that you can find in the market today. Some of the examples are Gojek, Grab, and Postmates.

How much does it cost to create an app like Dunzo?

An app like Dunzo will cost you approximately $25,000 USD to $50,000 USD. The final budget depends upon the features and functionalities of the app. For an Oyelabs proprietary solution, the cost will come down to as low as $20,000 USD.

What are some challenges multi delivery apps like Dunzo face?

Major problems faced by multi delivery apps is user retention, delivery time constraints, and being delivery-only service unavailability of certain items can lead to losing customer trust. To tackle these problems businesses create an efficient delivery network, integrating the inventory management system, keeping the product list updated in real-time, regularly providing good deals to customers, and more.

Leave your thought here

Your email address will not be published. Required fields are marked *

Have an idea for a mobile app?

Get ready to digitally transform your business.