Two years ago a newspaper in Bengaluru ran a story that sanjeevani, the miracle herb which saved Lakshmana’s life in the epic Ramayana, was available on Brigade Road, in the heart of the city. An intrepid resident saw the report and decided to raise a task on the hyperlocal concierge and delivery services app Dunzo – “Get me the sanjeevani herb from Brigade Road.” For good measure, he uploaded the news article.

According to Dunzo’s co-founder and CEO, Kabeer Biswas, the appearance of this task caused quite the stir in the office. The rider whom the task got assigned to decided to take up the challenge, though it wasn’t surprising that his efforts came to naught. That was one of few tasks that Dunzo couldn’t complete.

Ever since its inception in January 2015, Dunzo has become the go-to app for residents of Bengaluru, where the company is headquartered, to get everything delivered from laundry, important documents, a laptop charger forgotten in the office, to sanitary napkins, cigarettes, beer, speakers repaired and even large potted plants.

What started off as a hobby on a WhatsApp group has become the first Indian company to receive direct funding from Google, to the tune of $12 million in December. It recently expanded into Pune and Gurgaon and is looking to reach four more cities by the end of 2018.

Gap in the market

Biswas moved to Bengaluru in 2014, after Hike Messenger bought over Hopper, a location-based couponing start-up that he had co-founded in Gurgaon. The idea behind Dunzo had been brewing in his head for more than a year now, rooted in the thought, “Why should I do the things I don’t enjoy doing?” This was the gap that he identified in the market and it became the cornerstone for Dunzo. A WhatsApp group was created and friends started asking Biswas to run their daily errands for them.

Soon he was hanging around Lavelle Road and traversing the city on his bike collecting laundry, delivering Diet Cokes, getting a grandfather clock repaired and running tasks for a whole host of people, including those who were to go on and become investors in Dunzo. “I genuinely enjoy running tasks,” said Biswas. “And even today, [I] try and go out and run a task once in two or three weeks. I don’t think you should start businesses because you want to make that business happen. You should make products that you enjoy using and keep your eye out, to see what it can become.”

Traffic picked up on Dunzo and soon Biswas found that random people were messaging on the group asking for errands to be run. “It’s the nature of hyper convenience,” he said. Getting tasks done by someone else is not new – drivers are asked to pick up vegetables; the security guard is requested to courier documents; and domestic workers buy vegetables on their way to work. “Dunzo democratised the process,” said Gautam John, a lawyer and entrepreneur and one of the early users to get onto the platform.

One of Dunzo’s earliest tasks was requested by a mother who wanted her child’s school books covered with brown paper. And they actually found someone to do this. “People are now willing to do anything to pay for convenience,” said Biswas.

Getting it done

Some of the early investors in Dunzo included Blume Ventures, Aspada and angel investors like Rajan Anandan and Sandipan Chattopadhyay. Biswas was joined by Mukund Jha, Ankur Aggarwal and Dalvir Suri as co-founders in September 2015. The company migrated from WhatsApp to its own app in February 2016 – an engineering team was set up and things started moving fast. By April that year, traffic started doubling almost every three weeks. “We learnt something then,” said Biswas. “That this is not a user or demand problem, but a supply business.”

Dunzo is a simple app to use. The user raises a task, specifying what they want done and a delivery executive, called a partner by the company, is assigned to work on it. All of this is done via a chat interface. At the time of assignment, the partner starts driving to the location of the task – a store or a pick-up address, for example. Once there, the partner fulfills the customer’s order and sends pictures to the user for confirmation. Once the items are confirmed, the partner buys the items, and starts driving to the user to drop them off.

“Our smallest order was for 40 paise,” said Biswas. “Someone wanted one tablet delivered to her at night.”

Play

Nirmala Balakrishnan, a restaurateur, who lives in central Bengaluru is a huge fan of the app – “It’s a fantastic service that has made our lives so easy.” Apart from having lunch dropped off at her husband’s office, she uses Dunzo to get food delivered from some of her favourite restaurants that are either far away or don’t fall under any delivery service.

“My most memorable experience with Dunzo was ordering two paans after midnight,” said Sanjay Kumar, who works at a sports portal. “I did it for a lark, not really expecting that someone will deliver it. And I was amazed that they did. The paans landed 45 minutes later and the delivery charge was higher than the cost of the paans. But it gave me a thrill.”

Priyadarshini Mukherjee, an entrepreneur, has been a regular user for more than two years now, and she describes it as her “lifeline. My time is precious to me. Am I going to spend my time going to the dry cleaners or would I rather use that time more effectively? The math works for me. I don’t like doing those tasks, Dunzo allows me to simplify my life and I can afford to give myself these comforts.” From buying a bottle of whisky as a last-minute gift that a relative wanted just before she was scheduled to travel to getting lunch delivered to a friend’s house as a surprise, Dunzo is like a personal assistant for Priyadarshini. “I wanted to buy a kurta so I sent an image of the outfit and the store details. The rider messaged informing about the size options, I told him which one and it was done.”

People, Biswas reckoned, would jump through hoops to save time and the key would be to have enough people on ground to enable this. Dunzo has proved this to be true.

The company currently has 4,000 riders, covering almost 75% to 80% of Bengaluru, and it hopes the numbers will rise to 25,000 by the end of 2018. There have been around 1 lakh app downloads and it is executing around 1.2 lakh tasks every month – a number Biswas hopes will increase to 1 lakh tasks per day by 2018. “We have best in class repeat rations with a 40% retention ratio,” he said. Around 70% of the tasks are purchases, and 25% are pickups.

Favourable conditions

So what is it that has made a hyperlocal fulfilment business go viral in a city like Bengaluru? It’s first important to look at the neighbourhoods where Dunzo gained most traction – around MG Road, Indiranagar, Bellandur, Koramangala, Sarjapura, which are peak traffic zones, part of the IT belt and newer areas of the city, also populated to a large extent by people working in the IT-enabled professions.

“These are the people who are tech-savvy and comfortable with apps,” said Harini Nagendra, professor of sustainability at Azim Premji University. Another factor that plays a role, she says, is that it is difficult to walk around in these neighbourhoods, which is not true in older areas such as Basavanagudi and Malleswaram.

Dunzo’s popularity also suggests a mindset change. “Today everything is accessible, everything is consumable,” said Nagendra. “That means you may do a lot more things with a lot less planning than you would have done earlier. Also, what was constraining our parent’s generation was not a lack of time, but perhaps a lack of money. Today you have the money but not the time. It’s all about using your constraint wisely.”

Peak hour traffic in Bengaluru. Photo credit: Diptiprakashpalai/Wikimedia Commons [Creative Commons Attribution-Share Alike 3.0 Unported license]
Peak hour traffic in Bengaluru. Photo credit: Diptiprakashpalai/Wikimedia Commons [Creative Commons Attribution-Share Alike 3.0 Unported license]

Traffic is a huge problem in Bengaluru. A recent survey by the Boston Consulting Group found it to be the second-most congested city among major metros of South East Asia. “And todays’ generation has the money to solve this problem,” said Biswas. “The income gap has reached that point where you can afford these small allowances and those can add up to make somebody else’s living.”

Biswas says there are essentially three categories of people who make up Dunzo’s runners. Around 50% to 55% are college students, often in their final year, for whom this is a viable way to make a bit of money. Another 20% to 25%, who log on for five or six hours, usually hold another job. The rest of them view this as their best way to make money and are online for around 10 to 12 hours. “Typically a runner makes around Rs 60-65 an hour,” said Biswas.

While services like Dunzo, Swiggy, Zomato, Uber, Ola have opened the entry level job market like never before, it does come at a price, according to Nagendra. “At one level it is empowering them,” she said, “but the question is just how sustainable is it for them? This would be a job that would burn you out. They are also another consumable. And while it is a quick way to make money at one level, it is also deeply disenfranchising. While it gives you, the consumer, the freedom, the city has become so expensive that they may have no choice but to work like this. So their choice is possibly because they have no choice.”

The Dunzo team.
The Dunzo team.

Growing pains

One of the reasons behind Dunzo’s spiralling success was the cult fan following they amassed within a short span of time. The word-of-mouth goodwill was tremendous and their loyal customers praised and recommended them on social media. “We were almost like evangelists,” said John, who was one of the early adopters and used the app more frequently on average.

However, while the number of users has grown exponentially since the early days, scaling up has left loyalists like John disappointed. DunzoX, a subscription service which unlocked benefits such as free delivery, priority support, was launched in April, but it has been discontinued and while deliveries up to 3 km are free, the fee is Rs 15 per km after that.

“While this is a great value proposition to get new customers on board, the challenge now is that as an old customer I don’t see any benefit related to being one,” said John. “It almost feels like a betrayal.” The time taken to complete tasks has increased compared to what it was six to eight months ago and rider non-availability seems to be a growing complaint. “While I would still recommend it, it would now be with a caveat to use it for non-urgent tasks,” he said.

Other users like Mukherjee believe that while non-availability of runners is something that has becoming increasingly troubling, the onus also lies on the consumer. “It’s a great tool, so I have to figure how I can use it to value add in my life,” she said.