I think Google will facilitate the small businesses by funding Dunzo. I can see something like this - User searches for something like "apples near me" on Google. Google shows a nearby shop with a button to get it "Delivered by Dunzo"?
Taking a wild guess here on why it makes sense for a company like Google to invest in a business like this.
For many years the Google maps which is a widely accepted application is free (like most Google products) and down the years Google could decide to milk this cow by charging a very nominal fees from the shops to enlist themselves on the platform since this is a very hyper local business model. Beneficial for both Google and dunzo.
I think listing will always be free. But they will monetize by driving demand to those stores through Dunzo's integration which will add a fulfilment layer over Google's discover layer
Excellent analysis Vivek. While you willfully kept the third side of marketplace (stores) aside from analysis, stores are integral part of demand generation. Users visits Dunzo primarily for selection (#stores, #products). Hence, to kickstart the flywheel aggregator do burn significant amount of money with stores too.
I still believe the larger reason a user visits Dunzo is for the 45 minutes delivery time and not for selection.
Why? Because even if a store is not listed on Dunzo, you can ask your Dunzo partner to get it form that store. Hence, onboarding stores, while it smoothens the experience obviously, isn't the primary factor.
But what gives weight to your point though is that you do need a team who does the store onboarding & cataloging of all the products. And this will be a significant expense for Dunzo at the start.
Cost of labor sounds like an influencer in a situation like this as well; cost of labor for those on Hello Alfred might be higher than needed for delivery partners on Dunzo.
While cost of labour is a major factor in dictating if a hyperlocal business is profitable, I don't think that's the reason Google has not yet invested in a delivery company in the US. I suspect it is more to do with anti-trust.
Good question. Hello Alfred actually has a very high-touch model and are positioned as Home Managers. So they are not exactly like Dunzo. Closer comparables are TaskRabbit and Postmates.
Why they haven't acquired any of these - I am not sure yet
I wonder why you would classify Dunzo as 'on-demand logistics layer'?
If shops are listing themselves & their products on Dunzo app and allowing users to place orders on app > are they not more like Uber Eats? - This classifies Dunzo as a marketplace essentially!
Unless Dunzo is offering logistics layer to shops without the need to list themselves and products on the app for demand side to place orders using the app but the users use the app only to track delivery > then it is fair to classify it as 'on-demand logistics layer' - which now classifies Dunzo as a platform!
Now depending on what % of demand side is owned by Dunzo (using the app) vs unowned % where order is placed on 3rd party site which uses 'Checkout with Dunzo' > and if the unowned % is much larger than owned % > then it is more of a 'on-demand logistics layer' which makes sense for Google investment as a 'Platform' opportunity'!
I think Google will facilitate the small businesses by funding Dunzo. I can see something like this - User searches for something like "apples near me" on Google. Google shows a nearby shop with a button to get it "Delivered by Dunzo"?
Looking forward to the next part!
Exactly! You are bang-on right :)
Taking a wild guess here on why it makes sense for a company like Google to invest in a business like this.
For many years the Google maps which is a widely accepted application is free (like most Google products) and down the years Google could decide to milk this cow by charging a very nominal fees from the shops to enlist themselves on the platform since this is a very hyper local business model. Beneficial for both Google and dunzo.
I think listing will always be free. But they will monetize by driving demand to those stores through Dunzo's integration which will add a fulfilment layer over Google's discover layer
Love the gifs in the piece! What did you use to make them?
Keynote on Mac :)
Excellent analysis Vivek. While you willfully kept the third side of marketplace (stores) aside from analysis, stores are integral part of demand generation. Users visits Dunzo primarily for selection (#stores, #products). Hence, to kickstart the flywheel aggregator do burn significant amount of money with stores too.
I still believe the larger reason a user visits Dunzo is for the 45 minutes delivery time and not for selection.
Why? Because even if a store is not listed on Dunzo, you can ask your Dunzo partner to get it form that store. Hence, onboarding stores, while it smoothens the experience obviously, isn't the primary factor.
But what gives weight to your point though is that you do need a team who does the store onboarding & cataloging of all the products. And this will be a significant expense for Dunzo at the start.
Tv advertising is best option for business grow up at this time same peoples are watching tv news channel and mobile advertising
Google already has a similar model in the US
Could you point me to any link or name of the service? Thanks in advance!
The closest comparison to dunzo in the USA would be that of "Hello Alfred".
What does google see in dunzo that it does not see in Hello Alfred?
Cost of labor sounds like an influencer in a situation like this as well; cost of labor for those on Hello Alfred might be higher than needed for delivery partners on Dunzo.
While cost of labour is a major factor in dictating if a hyperlocal business is profitable, I don't think that's the reason Google has not yet invested in a delivery company in the US. I suspect it is more to do with anti-trust.
PS: Hello Alfred is actually profitable
Good question. Hello Alfred actually has a very high-touch model and are positioned as Home Managers. So they are not exactly like Dunzo. Closer comparables are TaskRabbit and Postmates.
Why they haven't acquired any of these - I am not sure yet
Thanks for this simplanation and your reply.
It has given me great insights on the app I use on a daily basis.
Would like to get in touch with you and discuss the same in detail.
I wonder why you would classify Dunzo as 'on-demand logistics layer'?
If shops are listing themselves & their products on Dunzo app and allowing users to place orders on app > are they not more like Uber Eats? - This classifies Dunzo as a marketplace essentially!
Unless Dunzo is offering logistics layer to shops without the need to list themselves and products on the app for demand side to place orders using the app but the users use the app only to track delivery > then it is fair to classify it as 'on-demand logistics layer' - which now classifies Dunzo as a platform!
Now depending on what % of demand side is owned by Dunzo (using the app) vs unowned % where order is placed on 3rd party site which uses 'Checkout with Dunzo' > and if the unowned % is much larger than owned % > then it is more of a 'on-demand logistics layer' which makes sense for Google investment as a 'Platform' opportunity'!