dunzo Business Model – How does dunzo make money

Getting things done these days is very easy compared to a decade ago. The main reason for this is the rapid development of technology. Technology has made the life of people easier than ever before. These days you can just get anything done while sitting at your home. All you have to do is have a smartphone or a laptop along with a good internet connection. That’s it, you can avail all types of services from your home. If you want to buy something all you have to do is go to an e-commerce website and order the things you need. Within a day or two they will get delivered to your home. One of the services that have become very popular in recent times is online food delivery services. When you are craving some food but don’t want to go out just place an order through your smartphone.

The rise of technology has inspired people to come up with new ways to solve their problems. If you just observe you will see that there are new startups and applications that are entering the market every day. These startups are finding solutions for problems that people didn’t realize they had. One such thing is getting your groceries delivered. No one thought that they needed an application that would help them in getting their groceries. But today you have companies like Big basket that deliver your groceries. Currently, there are applications for almost any type of service. If you want a Taxi then you can book an Uber through mobile. There are even services that will deliver your medicines. But using different applications for each of these tasks may seem frustrating. What if you could do all these using one application? Today’s article is about one such application called Dunzo.

What is Dunzo and How does it work?

Dunzo is an Indian company that has its main headquarters in Bangalore. It is purely a delivery service. Dunzo doesn’t sell any products but they will deliver the things that you need. It was founded in the year 2014 by Ankur Agarwal, Mukund Jha, Kabeer Biswas, and Dalvir Suri in Bangalore which is known as the city of startups in India. This is because many successful companies like Myntra, Flipkart, Swiggy, Big Basket, etc were founded in Bangalore. Even this was not the first startup that was founded by one of the founders Kabeer Biswas. He founded a company called Hoppr before. This company was acquired by Hike. After that happened Kabeer Biswas moved to Bangalore where he founded Dunzo. One day he had this idea in which he thought how great it would be to just get your tasks done by someone. 

It seemed like a great idea and he wanted to test it out. The idea was to assign your tasks to someone else and get them done. The initial version of Dunzo was not even a website, it was a WhatsApp service. After a little while, they started gaining users and we’re completing tasks given by them. Soon they started getting more than 500 orders every day. That’s when things started to get serious. They thought the business model is going to be a success and decided to come up with their own application. Currently, the company offers its services in eight major cities that are Bangalore, Hyderabad, Delhi, Pune, Chennai, Gurugram, Mumbai, Pune, and Jaipur. All you have to do is go to their website and place your order whether it is food, groceries, medicine, etc. They even deliver things like documents or clothes you forgot at your home.

Business model of Dunzo 

Dunzo has a simple job to do that is getting the tasks are done that are given to them by the users. Unlike other delivery services, it does not confine itself to a single task. There are a lot of tasks that Dunzo does for its users. You already know that it delivers food, groceries, and medicines. But you can also make them do other things like making them get the things you forgot at your or making them deliver a package to your friend or a family member’s house who lives in the same city. Apart from this Dunzo also acts as a bike taxi if you want to go somewhere. With one goal but several tasks, Dunzo has to be associated with people involved in various businesses to provide the services they promise. So let’s look at the important aspects of its business model. 

Merchants

Since Dunzo deals with lots of services it has to be associated with all kinds of merchants. It has to be associated with supermarkets if it wants to deliver groceries. Similarly, it also has to be associated with restaurants to deliver food and pharmacies to deliver medicine. Apart from these it also has to partner with other businesses like pet stores, meat shops, hair salons, and other businesses. Dunzo has managed to get all of those businesses on board to allow it to provide its services through its application.

It must not have been a difficult task to get restaurants and supermarkets as they are used to being associated with delivery services. But the other businesses might have been difficult as you normally wouldn’t expect service to deliver things like freshly chopped meat or pet medicine. By partnering with Dunzo these businesses will be able to sell more and generate more profit. Above all they don’t even have to wait for the customers Dunzo brings the business to them. Not only that but their businesses will also get promotions in the areas they are present at. A pet store which not many people knew about would be getting orders if people order some pet related stuff from Dunzo. 

Users

No merchant would partner up with a company if it doesn’t guarantee sales. To guarantee sales you need users who would use your app to get their tasks done. But the problem with Dunzo is also its strength which is being able to deliver anything. At first, people would be confused to know what it actually is. This is because it is a combination of food, grocery, medicine, and package delivery service which is a bit difficult to understand for the first time. On top of that, you also have other applications that can do these things. However, they cannot do two different tasks at the same time. Through Dunzo you can place an order to get your groceries and medicines delivered at the same time. 

Not only that but Dunzo is known for completing the tasks quite quickly. You can get things delivered from anyplace anywhere 24×7. This is a great thing because people don’t have to keep thinking if they could get something delivered at a particular time. All they have to do is place the order and wait till the order gets delivered. They can even see where the delivery agent is at a particular time after playing their order. Above there is no service that delivers your packages from one place to another place on demand. To acquire customers quickly it has followed the most common strategy that is followed by every new business that is giving discounts. You will find discounts on almost all things if you have recently installed Dunzo. 

Delivery partners

These are some of the most important parts of their business if they want to make money. This is because usually with delivery services you have to deliver one type of thing like food or groceries. But with Dunzo it is completely different. The delivery partner has to complete whatever task that is assigned to them. They have to deliver all kinds of things on demand. 

Another thing about being a delivery partner with Dunzo is the amount of distance you have to travel to get the job done. You have to be ready to travel to whichever part of the city when required. This is because Dunzo also delivers packages to customers. So the company makes sure that the delivery agents have all the necessary skills and equipment required to deliver the items safely. They provide them with a bag that saves the products from getting damaged. These delivery agents also get good pay because of the intensity of their work. 

How does Dunzo make money?

As you already know Dunzo is completely about delivering stuff so the way it earns money is similar to other online delivery services. Like them, it also earns money in more than one. Let’s look at the in which it generates revenue. 

Commissions

This is the most common way in which delivery services earn money. Dunzo charges a commission fee from their partners for delivering their products. The percentage of commission changes from business to business. It can be anywhere between 10% to 30% depending on the business.

Delivery charges

This is also an obvious way in which Dunzo earns money. It is a delivery service so it will charge you delivery fees. This fee depends upon the distance a delivery agent has to travel. The longer the distance the more the delivery charges. Normally it is anywhere between ₹10 to ₹50. But this does not apply all the time. Because Dunzo increases the delivery charges when the demand is high. This happens when more people from a particular are trying to avail of the delivery services for particular things. So every order that is placed at that time will have increased delivery charges. 

Conclusion

This is the business model of Dunzo. It is an on-demand hyperlocal delivery model that is gaining popularity. Dunzo is also the first Indian startup to receive direct funding from Google. There are other articles on Zeen about the business models of different companies Zeen. One such article is about the business model of Zillow which you can check out here

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