How Does Dunzo Work - Business & Revenue Model Explained

How Does Dunzo Work – Business & Revenue Model Explained

Dunzo Business Model
On-Demand Delivery Apps / The On-Demand Economy

How Does Dunzo Work – Business & Revenue Model Explained

Last Updated on June 16, 2022

Introduction

A multi-services app, also known as a 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 are 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 Name Dunzo
Category Online Consumer Services
Founded July 2014
Founders Kabeer Biswas, Mukund Jha, Ankur Agarwal and Dalvir Suri
Headquarter Bengaluru, India
Parent Organization Dunzo Digital Private Limited
Valuation $245 million
App Downloads 5,000,000+

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. According to Dunzo Delivery’s 2021 reports, almost 17,000 people ordered groceries in a single month in 2021.

Dunzo’s Growth Timeline

The table below shows Dunzo’s funding details

Date Amount Investors
November 2016 $1.18 Million Aspada Investment
December 2017 $12.3 Million Google, Blume Ventures, Aspada   Investment
November 2018 $70 Million Alteria Capital
February 2019 $3.1 Million Blume Ventures, Lakshmi Narayanan,   Raintree Family Office, Monika Garware Modi
February 2019 $420k
April 2019 $684.2 Million Google, Blume Ventures, Alteria   Capital, Patni Wealth Advisors
May 2019 $50 Million Kalpavriksh Fund
June 2019 $29.9 Million Belltower Fund Group Ltd
August 2019 $2.8 Million Alteria Capital
October 2019 $45 Million Lightbox Ventures, 3L Capital,   STIC Investment, STIC Ventures and Google
February 2020 $11 Million Alteria Capital
September 2020 $28 Million Google, 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 the shopping and pick up things on their own, and want to shop for some products or send over.

Users have the option 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, paan, 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.

Related Read: Business Model Of Gojek

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    Here’s the workflow of Dunzo

    • The 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 up 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. The 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 with a smooth and good user experience, the company makes use of AI in its solution.

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    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 from Rs. 10 to Rs. 60 depending on 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 prices as well. When there is a spike in demand, the price increases as per the increased demand.

    5. Other Categories – Apart from the multiple services, like food delivery, grocery delivery, and other services it offers, there is also a category that 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 with our years of experience in this field.

    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.

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