A 86 percent decrease in Google-backed e-commerce platform Dunzo’s advertisement and marketing expenses has resulted in a 67 percent increase of its revenue in the FY21, according to data provided by the company in a press release. The decrease in marketing expenses has also translated into a 43 percent decrease in cash burn for the company, the data indicated.
The time period of these figures which coincide with the pandemic and the subequent lockdowns in the country, signify the level of reliance Indian consumers had on e-commerce platforms such as Dunzo, Swiggy, Big Basket during the period. This also shows a significant behavioural shift with Indian consumers, who are adapting to more frequent, small-sized purchases compared to larger, monthly purchases for everyday products and consumables.
All the numbers
- Gross merchandise value: GMV (which includes value of products solid and user delivery fees) increased from Rs 360 crore in FY 2020 to Rs 590 crore in FY2021.
- Marketing expenses: This decreased from Rs 48.2 crore in FY 2020 to Rs 9.9 crore FY 2021
- EBTIDA Burn: EBTIDA decreased from Rs 327 crore in FY 2020 to Rs 212.2 crore in FY 2021.
- Overall burn decreased by 35 percent in FY21, the company said.
- User base: 90 per cent users signed on to the platform organically over the last year
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What is in hold for the future?
Kabeer Biswas, CEO and Co-Founder of Dunzo said in a statement that he expects that competitive pressures will go up. For FY22, the company said its expects growth in its Quick Commerce segment. According to an industry report by Redseer that Dunzo referred in its release, the addressable market for quick commerce is projected to be $75 Bn+ by 2025, creating a multi-billion dollar opportunity for Dunzo.
In the coming weeks and leading up to 2022, the company said it will:
- Set up 300 micro fulfillment centers across 700 neighborhoods in the country
- Aim to facilitate deliveries in under 19 minutes
- Increase services to 20 more cities in India in the next 18 months
- 2,000 stock keeping units (SKUs) for Dunzo Daily for the 20 cities
Dunzo recently entered the grocery delivery segment
In a blog post from August 17, Dunzo announced that it entered the online grocery delivery space with Dunzo Daily. Dunzo pitched its new service as “ultra-fast grocery delivery,” promising to deliver orders in 19 minutes.
At the time of announcement, the service was active in Bengaluru for a few weeks now and Dunzo had claimed that it was growing over25%week on week with customers using the service 2.5 times a week
Meanwhile, ETtech reported that Tata’s plan to invest in Dunzo has hit a roadblock because the latter does not want to give up majority control. Interestingly, Tata recently acquired majority control in BigBasket, which is a rival to the up-and-coming Dunzo Daily, but both companies are figuring out a way to work together (more on this later in the post).
Separate app for cigarette orders
After removing cigarettes from its main app due to new Play Store policies, delivery service Dunzo launched an identical but slightly rebranded version of its Android app called “Dunzo Mo” that allows for cigarette orders.
The workaround app was silently made available on its website, and is available as an APK download outside the Play Store ecosystem; cigarette orders continue to be available on iOS and Dunzo’s web version. The company moved quickly — as it was just in April that Dunzo stopped offering cigarettes on its Android app and confirmed that the delisting was due to Google’s policies.
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