TheNFAPost Podcast

97% Reduction in Expenses to Operating Revenue Ratio FY’19 – FY’21

Bengaluru, NFAPost: India’s premier quick commerce and delivery platform Dunzo has scaled revenue around 1.6x in FY21 while serving as an essential service during an ongoing pandemic.

Dunzo has also reduced cash burn by 43% and used its distinct first-mover advantage to establish its dominance as a Q-commerce platform in the Indian market.

1.6x YoY growth in Gross Merchandise Value

*Gross Merchandise Value includes the value of products sold on the platform & User Delivery Fees. Figures shown are in INR Mn.

Dunzo has scaled its GMV by ~65% in FY21, on the back of organic demand, with more than 90% of users signing up to the platform organically over the last year. This is driven by a significant behavioral shift with Indian consumers, who are adapting to more frequent, small-sized purchases compared to larger, monthly purchases for everyday products and consumables.

As a result, Dunzo has been able to drive advertising and marketing expenses down 86% YoY. Combined with a reduction in operational costs, Dunzo is beginning to display operating leverage and has cut overall burn by 35% in FY21.

86% YoY reduction in Advertising & Marketing Expenses, 35% YoY reduction in EBITDA Burn

*Figures shown are in INR Mn.

Commenting on the company’s performance, Dunzo CEO & Cofounder Kabeer Biswas said he firmly believe that competitive pressures will go up.

“But being the team that created the category and led the market allows us to push innovation forward on behalf of our users. We expect folks to mimic what we do, and we will continue to out-innovate on behalf of our consumers as we go forward,” says Kabeer Biswas.

Continuing its growth story in FY22, Dunzo expects growth to be fuelled by its Quick Commerce segment – in the last quarter alone (FY’22-Q1), Dunzo has witnessed nearly 2X quarter on quarter growth.

According to an industry report by Redseer, the addressable market for quick commerce is projected to be over $75 billion by 2025, creating a multi-billion dollar opportunity for Dunzo.

In the coming weeks and leading up to 2022, Dunzo will be deploying over 300 micro fulfillment centers across 700 neighborhoods in the country, facilitating deliveries in under 19 mins.

Expanding and deepening its Dunzo Daily offering with the top 2,000 SKUs, Dunzo will scale its services to the top 20 cities in India in the next 18 months.

Dunzo’s sharp focus on scaling its consumables category across Bangalore as a first step has helped it create a replicable playbook for its next 20 cities. It has also set the industry benchmark with high user retention rates and frequency, with users transacting more than 2 times per week.

As Dunzo continually improves its unit economics, it has reduced its expenses per rupee of operating revenue earned from INR 13 in FY20 to ~INR 6 in FY21.

About Dunzo

Dunzo is a quick commerce platform on a mission to deliver convenience, choice, and control to everyday living. Leveraging local retail and its fulfillment centers, Dunzo is able to fulfill the delivery of groceries, fresh products, medicines, and other consumable products in 15 – 20 minutes.

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