Dunzo, which started hyperlocal delivery in India, has faced increasing difficulties. Dunzo, which started as a WhatsApp group in 2014 and became popular across the country after starting its pick-up and drop services from Bengaluru, is now moving towards reaching its final destination. Kabir Biswas, who was the co-founder of Dunzo, will now lead Flipkart’s quick commerce operation ‘Minutes’, which raises questions about the company’s future.

Dunzo had a tough time in the past few years

Dunzo’s difficulties are not limited to just financial challenges. Kabir Biswas’s departure and the changes taking place in Dunzo prove that the company’s management is struggling for stability. In 2022, Reliance Retail bought a 26% stake in Dunzo, but even after that the company could not improve its business model and operations.

Dunzo expanded its hyperlocal delivery model, but along with it undermined its own financial health. IPL sponsorships and high-budget marketing campaigns greatly increased the company’s cash burn. All this became so costly that the company started questioning its funding and operational stability.

Hindus in the path of growth

The company also faced problems with Dunzo’s plan to deliver groceries in 15-20 minutes ‘Dunzo Daily’. Monthly expenses exceeded Rs 100 crore, and after this the lack of funding made the situation even tougher. When the company’s cash reserves started to run out, Flipkart proposed to buy Dunzo, but investors opposed that too.

Competitors’ view

When it comes to quick commerce, the competition is also quite intense. Competitors like Blinkit, Zepto, Swiggy Instamart have established their market, and Dunzo is struggling to create its unique identity. This sector is expected to reach 20 billion dollars by 2026, in which Dunzo is finding it difficult to maintain its position.

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