Reliance Retail & Dunzo - A simple analysis of 25.8% stake acquisition by Reliance Retail in Dunzo!

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Reliance Retail ने $200 Million Invest करके Dunzo में 25.8% हिस्सा acquire किया

Grocery consumption basket (Reliance Fresh etc.)
Consumer Electronics consumption basket (Reliance Digital, My Jio Store etc.)
Fashion and Lifestyle consumption basket (Reliance Trends, Reliance Jewels etc.)
Digital commerce channels through AJIO.com

Reliance Retail has more than 150 million customers buying across all its formats.
Recorded more than 640 million footfalls across all its stores in FY20,
With over 100,000 transactions per hour

Dunzo is an app that connects you to the nearest delivery partner who can make purchases, pick up items from any store or restaurant in the city and bring them to you.

Dunzo allows its customers to buy a wide range of items across several categories, from grocery, perishables, pet supplies and medicines to dinner from their neighborhood stores and restaurants.

Customers can also use Dunzo to move their own items — such laptops, chargers, medicines, and lunch — around the city (local Courier service)

In 2021, Dunzo had launched its instant delivery model 'Dunzo Daily' in Bengaluru. The startup said it is seeing over 20% week-on-week growth without disclosing any figures.

The Dunzo Daily model aims to deliver daily and weekly essentials within 19 minutes.

Reliance has acquired a 25.8 percent stake in Bengaluru-based Dunzo for $200 million (nearly ₹ 1,488 crore) , valuing Dunzo at about $800 million

The delivery firm raised $240 million in its latest funding round that was led by Reliance Retail Ventures Ltd (RRVL) - the retail arm of Reliance Industries

Existing investors Lightbox, Ligthrock, 3L Capital and Alteria Capital also participated in the funding round.

Founded by Kabeer Biswas in 2016, the $240 million shot in the arm is more than what Dunzo has raised all these years- about $140 million.

Dunzo’s other investors include Blume Ventures and Google

This is Reliance’s second major entry of sorts into the grocery delivery space, besides its own JioMart service.

It also acquired Milkbasket last year, which delivers milk and daily staples to households in Delhi, Bengaluru, and other cities.

Dunzo also held conversations with Zomato, Swiggy, and the Tata Group for an investment, but talks didn’t materialize

People aware of the matter said that retaining control and staying at Dunzo’s helm was key for Biswas and played a role in finding an investor who will support that vision

The deal gives Dunzo ammunition to compete against Blinkit (earlier Grofers), new upstart Zepto, Swiggy-owned Instamart, and BigBasket, among others, and deliver groceries and essential items to urban households quickly.

While Blinkit and Zepto promise delivery in 10 minutes- a cash-guzzling proposition- Dunzo offers 19-minute delivery, led by its belief that delivering in 10 minutes is not a big enough market yet and that delivery workers will bear the brunt of quick deliveries

Dunzo said Thursday that it plans to expand to more geographies — an additional eight cities — and broaden its quick commerce play with the fresh funds.

Dunzo is a leading player in the quick commerce category which has an addressable market opportunity of over USD 50 billion.

Through our partnership with Dunzo, we will be able to provide increased convenience to Reliance Retail's consumers and differentiated customer experience through rapid delivery of products from Reliance Retail stores

Dunzo will also facilitate last mile deliveries for JioMart’s merchant network.

E-commerce accounts for less than 3% of all retail sales in India, according to industry estimates. Mom and pop stores and other neighborhood outlets that dot tens of thousands of cities, towns, villages and slums across the country drive most of the sales in the nation.

The quick commerce frenzy has caught wind globally, with startups such as Jokr, Getir, Gorillas, and others promising 10 minute delivery in cities from New York to Turkey to London.

One of these firms loses $159 on every single order, as per a report from The Information, indicating the financially bruising nature of the business.

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