Retail

In India, there is no winner-takes-all transactions business


Brands would love to become a verb. Like Xerox for photostat, or Uber for cab-hailing. Dunzo, the cigarette-to-smartphone delivery platform, has managed to break into that league. If you have forgotten your laptop at home, you can, as many say, Dunzo it. Dunzo will send someone to fetch it for you. In the past year, the venture has also tied up with large retailers, brands and kiranas, as part of a bigger move into commerce. In Gurgaon, its drivers offer bike taxi services too. Dunzo became the first domestic startup to secure direct funding from Google in late 2017. The four-year old startup is now expanding across India. From running 70,000 tasks a month at the start of 2018, Dunzo now clocks 1.5 million. Kabeer Biswas, cofounder and CEO of Dunzo, spoke to TOI on how he intends to grow this to 5-6 million tasks a month over the next year and what does the entry of players like Swiggy mean for him and the market. Excerpts:


Grofers tried midnight iPhone deliveries threefour years ago. Now you are doing the same with Xiaomi. What’s different this time?

I will be honest, the only thing that seems to be working really well for us at Dunzo is we run all three, commerce, courier & commute. This allows for our cost structures (driven by significantly higher utilisation of the delivery personnel) to look dramatically different. None of the businesses standalone can make money for too long. But when one does all the three, our demand peaks get smoothed out, and cost per order drops. We are a business to consumer (B2C) logistics business at its core, but the fact is, the cheapest fleet will always win. For that to happen, we are opening up a business-tobusiness (B2B) delivery option for local & larger merchants with the same logistics fleet. We think of the B2B part of the business as the Amazon Web Services (AWS) of this business.

Is Bengaluru your most mature market? How has the business mix changed in the last year?

Yes, Bengaluru also continues to grow very aggressively. It is about 40-45% of our total business. By the end of the year, hopefully, it will be down to about 25%.

I think the commerce part used to be about 50%, now it’s 60%. Rest is largely courier – most of it being peerto-peer (one party sending an item to another party). One large use-case is lunch dabbas. There are also mom-andpop shops using us.

There is enough local commerce happening, 98% of commerce is local. The only thing in enabling those is you have to do discovery, payments, and logistics. Right now we do payments with others but as soon as you become a commerce platform then payments becomes an interesting part of it. You will see large payments play from us sometime this year. It organically leads also to lending.


Given your push on organised merchants, how has their contribution changed?


It was zero about three to four months ago. Tied-up merchants now account for about 30% of the number of orders on our platform. The next step would be to increase their efficiencies. We can use data to tell them what items they should keep in stock. We are now growing this business 10-15% per month without losing money.

What do you think of Swiggy entering this space?

They should. In India, there is no winner-takes-all business, especially in transactions businesses.

There is a lot of buzz about Zomato and Swiggy investing in Dunzo. What’s happening there?

There is always a conversation on-going. I think I have maintained this for about a year now that we are in a much bigger business and our understanding of the whole space is better.





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