Dunzo plans to deploy over 300 micro fulfilment centres across 700 neighbourhoods in the country, it announced on Friday, August 27. This will be done leading up to 2022, and is aimed at facilitating deliveries under 19 minutes, the company said. The Dunzo Daily offering will offer the top 2,000 stock keeping units (SKUs) and is planning to expand to 20 cities over the next 18 months.
Dunzo said its focus on the consumables category in Bengaluru helped create a playbook for the 20 cities. Apart from Bengaluru, the company operates in Mumbai, Pune, Gurgaon, Delhi, Chennai, Hyderabad and Jaipur.
In the quick commerce segment, Dunzo said it saw nearly 2x quarter-on-quarter growth in Q1 of FY22. Dunzo said its user retention is high, with users using the service more than two times each week. “As Dunzo continually improves its unit economics, it has reduced its expenses per rupee of operating revenue earned from INR 13 in FY20 to ~INR 6 in FY21,” it said.
CEO Kabeer Biswas told Business Insider that they are aiming for 40 million customers to try Dunzo Daily over the next two years.
Dunzo currently promises deliveries on Dunzo Daily between 19 minutes and 29 minutes and aims to make deliveries in under 19 minutes. Biswas told Moneycontrol that the company plans to stick to that deadline, and doesn’t intend to crunch delivery timelines.
Dunzo said it scaled its gross merchandise value by ~65% in FY21, on the back of organic demand. According to the company, it was up from Rs 3,600 million to Rs 5,900 million. More than 90% of users signed up to the platform organically over the last year, it said.
“This is driven by a significant behavioral shift with Indian consumers, who are adapting to more frequent, small-sized purchases compared to larger, monthly purchases for everyday products and consumables…Combined with a reduction in operational costs, Dunzo is beginning to display operating leverage and has cut overall burn by 35% in FY21,” Dunzo said in a statement.
The company announced it has scaled revenue by roughly 1.6% in FY21, and reduced cash burn by 43%. Its advertising and marketing expenses are down by 86% year-on-year as well — down from Rs 482 million to Rs 99 million.
“We believe competitive pressures will go up, but being the team that created the category and led the market allows us to push innovation forward on behalf of our users. We expect folks to mimic what we do, and we will continue to out-innovate on behalf of our consumers as we go forward,” Biswas said in a statement.
According to a report by Redseer, the addressable market for quick commerce is projected to be $75 Bn+ by 2025.