Reliance Retail Ventures Ltd. invested $200 million (about Rs 1,490 crore) in Dunzo, joining the rush to drop packages within minutes of receiving orders to win over customers.
The retail arm of Reliance Industries Ltd. will own a 25.8% stake in the quick commerce platform on a fully diluted basis, according to a company statement. Existing investors Lightbox, Lightrock, 3L Capital and Alteria Capital also participated in the $240-million funding round.
The funds will be used to enable instant delivery of essentials from a network of micro warehouses and expand business-to-business vertical to enable logistics for local merchants in Indian cities, Reliance said.
Grocery is the next big category for online retailers as it contributes 65% of India’s nearly $900-billion retail market, according to Technopak Advisors. While frequency of buying is high, Indians prefer to shop for daily items at small kirana stores. To draw customers, Dunzo, Swiggy’s Instamart, Zomato-backed Grofers and Zepto offer to drop anything from a toothbrush to pulses and spices within 10 minutes. Amazon.com Inc., Walmart backed-Flipkart and Tata-owned Big Basket, too, are chasing it.
Dunzo, among the earliest entrants to tap on-demand delivery, is available in seven metros and the additional capital raised from Reliance will be used to expand the quick commerce business to 15 cities.
Dunzo, which launched ‘Dunzo Daily’ to deliver daily essentials in 15-20 minutes in Bengaluru earlier this year, is seeing more than 20% week-on-week growth, the statement said. Quick commerce, according to Dunzo, has an addressable market opportunity of more than $50 billion.
Strengthening Ties
Dunzo will enable hyperlocal delivery for Reliance Retail stores and provide last-mile coverage for JioMart’s merchant network, the statement said.
“We are seeing a shift in consumption patterns to online and have been highly impressed with how Dunzo has disrupted the space,” Isha Ambani, director at Reliance Retail, said.
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