Dunzo Daily to increase delivery time and reduce distance: Report

Company backed by Reliance Retail won't expand to new cities after burning more than Rs 100 cr in the last quarter

Quick commerce company Dunzo aims to expand operations and cut expenses of its grocery delivery service as competition picks up in the sector, said a media report on Thursday.

The company aims to incentivise 60-minute deliveries so that it can batch several orders together and reduce cost, reported the Economic Times (ET). It will focus less on long-distance deliveries aiming to save Rs 8-10 per order by avoiding such deliveries. The company has stalled its plan to expand to 15 cities and will focus on seven cities it has business in, ET said. (Not clear what that sentence means)

The company, backed by Reliance Retail, had a monthly burn of over Rs 100 crore in the quarter ending June and July.

A large chunk of Rs 100 crore went for advertising in the Indian Premier League (IPL). "They (Dunzo) went aggressive with IPL at a time when all quick commerce platforms were going crazy on acquiring consumers. They are now cutting back on spending and aiming to bring it back to first-quarter levels," people aware of the matter told ET.

Reliance Retail picked over a 25 per cent stake in the company for $240 million in January.

"The plan to expand to 15-16 cities is also not going ahead because they saw significant volumes from the current seven cities. That’s where they are aiming to go deeper in existing markets and turn profitable in Bengaluru and Pune," ET quoted people aware of the matter.

Dunzo aims to clock 11 million orders per month by December. In June, Dunzo Daily received 5.5 million orders. 

The change in the spending pattern can also be seen in Dunzo's competitors. Zepto's median delivery time has gone up from 8 minutes in October 2021 to 9-10 minutes in June 2022. Swiggy's Instamart has removed the 15-30 minute delivery from its marketing communication. It now reads, "Groceries in minutes."

Also, Blinkit, recently acquired by Zomato, has not promoted 10-minute deliveries since February and says 'Delivery in Minutes'. Instamart is the market leader in terms of daily order volumes in most of the cities, the ET report said.