Dunzo: A Product Case Study
Justifying how “quick, bold and reliable” Dunzo is…
Why did I choose Dunzo?
I was craving some Blueberry Cheesecake and a kind friend asked me to “Dunzo” it. That was the beginning of my affair with personal errand boy, Dunzo.
You know an app is going to “take off” when it becomes a verb in a sentence.
💡 Fun Fact- Speaking of verbs...Swiggy has an almost universal discount coupon "SwiggyIT". This is an interesting marketing gimmick, because it psychologically enables a verb mapping in the consumer's head. (But I digress, lets focus on Dunzo)
What does the company do?
Mission Statement: to be the logistics layer of every city
Values:
Customer Obsessed
100% ownership
Data driven
Work hard, party harder!
Big Ideas:
one of the most complex business spaces entailing a three-sided consumer approach consisting of users, partners, and merchants
They plan on becoming a habit for their users-
“Spanning over eight categories, we want to make Dunzo a part and parcel of everyone’s lives”
Unorganized to organized — product fit catering to myriad of audiences- from home business in a metropolitan city to a coconut vendor with limited internet
Best experience for their users, partners, and merchants — 5 star rating is only given when it is 5 stars for all 3 consumers
What makes Dunzo work so well?
Dunzo started its journey by creating a market for itself in the Hyperlocal space as a Concierge app. It was the first company Google invested in, in India. However, keeping in mind the thin line between short-term advantages and moat-building, let’s see what makes it work for Dunzo.
Economic Moats
"Wide moat" advantage for Dunzo
First mover’s advantage (which is a cool term for when someone is the first player to create/enter a market) which helped it gain sound investment from Google, gain brand recognition and customer loyalty (more about these later).
Strong marketing game (We have all seen the quirky one liners and get it “Dun”zo-ed puns all over Twitter, in promotional emails and billboards around the city)
High Agency
One of the most important PM traits is High Agency- when someone takes matters into their own hands and doesn’t wait for things to happen.
Kabeer Biswas (co-founder & CEO, Dunzo) famously ran tasks himself in the initial days when Dunzo was run through Whatsapp, which led to some of the great insights in optimising task efficiency today, where they have Rule-Based and Machine Learning models to check their task statuses.
“Biswas is taking a long view of things. Throughout our meeting, he goes back to the example of Amazon, founded in 1994, which took more than 15 years to start recording substantial profits.”
snippet from Kabeer Biswas’s interview with LiveMint.
💡 The founding team comprises people who exude High Agency.
Understanding What Happens Behind The Scenes
Breaking down insights from Dunzo’s product blog-
Ensuring Partner Availability: a Double Edged Sword
The platform caters to the partners as much as it does to the consumers. What will partners want? Earn more and in lesser time.
Earning requirements will differ from partner to partner. A two fold system to address this would be to allow partners to migrate towards areas with higher density of Users (or higher demand). This ensures higher partner availability, more orders and improving customer experience with faster turnaround times.
Creating Merchant Density
To ensure that the merchants on-boarded enjoy high demand, Dunzo offers two key services to them- logistics to extend the amount of area they cover and marketing and demand prediction support. This is how Dunzo is building trust.
💡 By investing in their relationship with the merchant, they build stronger community ties.
Activating and Deactivating Pin Codes
To keep up with limited partners and increasing demand, they dynamically deactivate pin codes with falling demands. In order to meet the user experience level, the demand, merchant density and partner availability are maintained at an equal capacity at all times.
Again, this brings to light Dunzo’s exceptional commitment to making user experience the utmost priority. In order to keep up the standard of exceptional customer experience for 99% of the uses, they choose to decrease the serviceable area by 1%.
Data Empowerment
The amount of data based insights Dunzo has puts it in the lead for targeting the right users for the right brand. With a five year lead on Swiggy, the customer base has allowed Dunzo to build itself a goldmine of data that it can use to predict user preferences and purchasing behavior.
Hindrances in getting it "Dun"
Increasing competition- According to this LiveMint article, a lot of money has been poured into funding startups entering the hyperlocal space ($1.7 bill in 2018, $286 mill in 2019 and $533 mill this year). The argument being, a small startup will grow in smaller areas that big players wouldn't care much about. Known competitors: Swiggy (Genie), Flipkart Quick, maybe even JioMart
Retaining Delivery Personnel - In spite of the focus Dunzo has on building a three way trust for all of its stakeholders, earning the loyalty of delivery personnel has been a challenge that all businesses in this space have faced- from LookUp, GoodService to Swiggy.
No Liability on Dunzo-
What happens when your items are not delivered or damaged- when you choose the "anything" option. There is a clear lack of safety rules and safeguards in place means greater vulnerability for customers and employees.
Snippet from User Terms and Conditions :
"…Dunzo shall not be liable in any manner or incur any liability with respect to the services performed by the Merchants or the Delivery Partners, as the case may be. ...Dunzo shall not be liable for the conduct, acts and omissions of the Merchants (including their employees and consultants) and Delivery Partners in the course of providing their services to You, or for any loss or damage to the Item or otherwise caused to You..."
Regulatory Challenges- Dunzo used to deliver alcohol in Bangalore (where it first launched) but had to curb the service because of clashes with regulations. Navigating the market regulations in India has been an ongoing challenge since when Flipkart first launched in 2007. However, ongoing government dialogues might ease the matter.
To conclude…
Dunzo has shown tremendous growth since its inception and success in the cities it has been functioning in. It has the scope of expanding the services it offers into becoming a major player in the hyperlocal delivery space. It faces tough competition from seasoned player Swiggy with the recent Swiggy Genie offering. The jury is still out on who will emerge victorious.
That’s All Folks! Please reach out to me for feedback and/or comments.
Disclaimer: Thoughts/opinions are my own, images are from Google and I tried making the article as link intensive as I could to get my citations right.
Further Reading: (For those who want to delve even deeper)