Business model of Dunzo

Introduction

Dunzo, a hyper local concierge app, the company has changed the way customers move things, how they shop, and much more. The platform enables customers with quick access to the city like never before. The Business model of Dunzo involves its business plan, revenue model, its competitors, SWOT Analysis and many more.

Dunzo Challenges Uber and Ola with Introduction of Bike Rides in Noida | Beebom

The platform offers an on-demand concierge service in the hyper-local market. The company operates through the data-driven solution, which connects delivery providers with the nearest users. Dunzo uses Artificial Intelligence at its best for the users helping them to offer a satisfied and smoother experience whenever customers demand. Dunzo provides all commodities on one platform be it grocery items, pet supplies, health and wellness, bike rides, laundry delivery, pick and drop services and a range of other services.

This name was selected by the startup owing to their focus on finishing or delegating the work which is assigned to them by their customers.

Business Plan

Dunzo ensures to answer all the requirements of customers in the city with its significant business model. It offers access to customers to have their favorite things right at their place. It ensures to provide incredible luxury to customers; whether it’s adult beverages, emergency shacks, dinner, or any other service, the delivery platform satisfies all the requirements efficiently. Using advanced E-Delivery apps, now customers spend a minimum of time from their hectic schedule to get things done.

It follows a hyperlocal delivery business model, ensuring platform success and survival for a longer time. Dunzo operates its business through a mobile app and website. Customers aiming to get everything delivered at their place are considered as ideal shoppers for Dunzo. The delivery platform tie-ups with some clothing stores, restaurants, and some general stores.

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.

Revenue Model

  • Dunzo charges some percentage as a commission from the partner store per order. The commission rate ranges from 15 to 30%. Local stores have to pay the amount when they complete the order request through the platform.
  • Dunzo delivery charge lies between Rs 10 to 60. The delivery charge mostly depends on the distance of the customer’s location and local shop.
  • Customers can request different services such as home services, repairs, etc. through the Dunzo platform in exchange for some amount.
  • There is also a category that covers all other kinds of requests, known as #kuchbhi request within the company.

Competitors

On-demand hyperlocal delivery business models are gaining momentum and popularity. Here is the list of some of the competitors of Dunzo:

  • Gojek
  • Grab
  • Swiggy Go
  • Jhutpat
  • Meratask
  • Jugnoo

SWOT Analysis

Strengths

  • Strong Customer: The wide product portfolio can allow the organization to expand the customer base and offset the losses from one product category with benefits obtained from the other.
  • Online Presence: Strong online presence on different social networking sites and efficient social media management can enhance the effect of positive e-WOM and develop strong relationships with customers.
  • Technical Advantage: The well-developed and efficiently integrated IT infrastructure can improve the operational efficiency and increase knowledge of the latest market trends.
  • Brand Loyalty: High product quality increases brand loyalty and improves Dunzo The Errand Boy of the Internet’s performance in a competitive market.

Weaknesses

  • Budgetary Issues: The cash shortage or insufficient current assets negatively affect the liquidity position and harms the overall business performance. Insufficient budget for the marketing and promotion activities weakens the firms’ ability to expand the customer base and encourage repeat purchase. Less expenditure on the research and development activities can weaken the company performance due to poor local/international market knowledge.
  • Customer Service: The poor customer service such as inefficient customer complaint handling, can trigger the negative word of mouth about the business and affect business growth.  The inability to understand customers’ needs and expectations lead to an ineffective strategic decision-making process. With this weakness, the organisation may not be able to identify the potential improvement seeking areas in product/service mix.
  • The decision making in the Dunzo The Errand Boy of the Internet takes too much time, causing expensive delays in introducing new products in the market. Poor project management practices can internally weaken the ability of the organisation to successfully open new branches or expand the product line. High job stress and consequent low workers’ morale makes the workforce less productive.

Opportunities

  • Rise in Income: Rise in the customers’ disposable income and increase in the affluent customer base can be taken as an opportunity to introduce more high-end products.  Customers may start preferring new and creative products/services as a result of changing tastes.
  • The emergence of e-commerce and social media marketing as a trend can be a great opportunity for Dunzo The Errand Boy of the Internet if it can ensure strong online presence on different social networking sites. The emergence of new market segments and new niches provide business and product line expansion opportunities.
  • Improvement in the customers– lifestyle and standards mean more consumption on consumer goods and services, and more opportunities to encourage the purchase. The exponential growth in the population, and particularly in the existing or potential customer segments is a great growth opportunity for the business organisation. The changing customer needs, tastes and preferences can act as an opportunity if the business organisation has good market knowledge.

Threats

  • Governmental Framework: The changing regulatory framework and introduction of new stricter regulations impose a major threat to the Dunzo The Errand Boy of the Internet. It makes compliance with legal standards more complex and challenging for the business organisation. Inability to comply with changed regulations raises the risk of expensive law suits.
  • Economic Factors: The rise in inflation increases the cost of production and affects the business profitability. The deteriorating economic conditions affect business performance when they directly influence the customers’ spending patterns and purchasing power.

Conclusion

Dunzo is a hyper-local on-demand delivery service in India. It is a delivery company that delivers anything and everything on-demand with minimum delivery charges. Dunzo has garnered massive popularity in the cities it presently operates in. The company has literally made the lives of people easy and stress-free.

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