An 86 percent decrease in advertising and marketing spend on Google-powered Dunzo e-commerce platform resulted in a 67 percent increase in revenue in FY21, according to the company’s data in a press release. The decrease in marketing spend also resulted in a 43 percent decrease in cash burn for the company, the data said.
The period of these numbers, which coincides with the pandemic and subsequent lockdowns in the country, shows Indian consumers’ confidence in ecommerce platforms like Dunzo, Swiggy and Big Basket over the reporting period. This also shows a significant change in behavior among Indian consumers who are adjusting to more frequent small purchases compared to larger, monthly purchases for everyday products and consumables.
All the numbers
- Gross value of goods: GMV (which includes the value of the solid products and user delivery charges) increased from Rs 360 billion in FY 2020 to Rs 590 billion in FY 2021.
- Marketing expenses: This decreased from 48.2 billion rupees in the 2020 financial year to 9.9 billion rupees in the 2021 financial year
- EBTIDA Burn: EBTIDA decreased from Rs 327 billion in FY 2020 to Rs 212.2 billion in FY 2021.
- Total combustion decreased by 35 percent in FY21, the company announced.
- User base: 90 percent of users registered organically on the platform last year
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What is the future?
Kabeer Biswas, Dunzo’s CEO and co-founder, said in a statement that he expects competitive pressures to increase. For FY22, the company expects growth in the quick commerce segment. According to an industry report by Redseer, which Dunzo referred to in its publication, the addressable fast trade market is projected to be $ 75 billion by 2025.
In the coming weeks and through 2022, the company announced the following:
- Set up 300 micro-fulfillment centers in 700 neighborhoods across the country
- Aim to facilitate deliveries in less than 19 minutes
- Expansion of services in 20 additional cities in India over the next 18 months
- 2,000 SKUs for Dunzo Daily for the 20 cities
Dunzo recently entered the grocery delivery segment
In a blog post on August 17th, Dunzo announced that it has entered the online grocery delivery space with Dunzo Daily. Dunzo called its new service “ultra-fast grocery delivery” and promised to deliver orders in 19 minutes.
At the time of the announcement, the service in Bengaluru had been up for a few weeks now and Dunzo had claimed it had grown by over 25% week in and week out, with customers using the service 2.5 times a week
In the meantime, ETtech reports that Tata’s plan to invest in Dunzo has encountered an obstacle because Dunzo does not want to give up majority power. Interestingly, Tata recently acquired a controlling stake in BigBasket, a rival to the up-and-coming Dunzo Daily, but the two companies find a way to work together (more on that later in the post).
Separate app for cigarette orders
After the delivery service Dunzo removed cigarettes from its main app due to new Play Store guidelines, it launched an identical but slightly renamed version of its Android app called “Dunzo Mo” that allows cigarette orders.
The workaround app was tacitly made available on their website and is available as an APK download outside of the Play Store ecosystem. Cigarette orders are still available on iOS and Dunzo’s web version. The company was moving fast – it wasn’t until April that Dunzo stopped selling cigarettes on its Android app and confirmed that the delisting was due to Google’s guidelines.