What are Dunzo CEO Kabeer Biswas's plans about funding and growth?
In a chat with Business Standard's Surajeet Das Gupta, quick commerce player Dunzo's CEO Kabeer Biswas tells about strategic partnership with Reliance Retail and long-term expansion plan. Listen in
Surajeet Das Gupta New Delhi
Q1: Generally, startups go to private equity funds and in various rounds raise money and valuation. You have done which is very different. You have gone to a large company that is also a major player in the retail space. So what was the reason?
>Building a new format of retail over the next 10-15 yrs
>Consumerism is getting quicker
>In strategic partnership with Reliance Retail with a long term vision
>The partnership is likely to help double the business volume in 5-10 yrs
>Leverage existing Reliance Retail supply chain in all cities of India and deliver merchandise to customers in 15-20 mins
>Can partner with Reliance Retail in their omnichannel retailing
>Open to working with financial investors in the next 5 years
Q2: You were saying that the partnership will change the speed at which you can grow. You were in seven cities and talked about reaching 20 cities. You are looking at a very moderate growth/expansion rate in cities. How will that change?
>Quick commerce daily and weekly essentials business will be in 20 Indian cities by the end of 2022
>B2B business will be in 50 cities of India by the end of 2022
>Partner with Reliance Retail in their omnichannel delivery platform
Q3: What is the number of SKUs will you have in this? Because today the issue is SKUs are limited to a certain amount of products. The other thing is, you do not get the kind of discounts which you would have got if you had waited for 15 mins or end of the day or next day.
>Stock-keeping units (SKU) of products in its warehouse are between 2,500 and 3,000 items
>Dunzo uses data analytics to study consumer buying behaviour
>Avoid offering a hypermarket selection because it won’t be profitable in this form factor
>Sharp selection of merchandise that customers buy frequently will be profitable
>Around 80% of the gross merchandising value (GMV) comes from 20% of the SKUs. So, Dunzo is focused on those 20% of SKUs and ensure warehouses are running on high capacity
>Quick commerce category is created out of convenience and quality, and not discounts
Q4: You had earlier talked about going for an IPO and taking the company public to raise funds. So, how is that moving for you now?
>Plans to go for IPO by 2024 and not before that
>Raise capital from private markets and PE investors in the next 3-6 months
>Aims to become the No 1 player in quick commerce category in 18-24 months
>Capital raised ($200-$300 million) in the next six months will help Dunzo grow faster
Q5: If you look at your model – is GMV will be from quick-service business and from the B2B business – what is the kind of ratio that you are looking at? Do you think it would eventually become a B2C platform?
>Gross merchandising value split between 80% from B2C and 20% from B2B business
>B2C business is growing much faster
>In the next 24 months, GMV split will be 90% from B2C and 10% from B2B
>Every B2C transaction is worth about Rs 400 and every B2C transaction is about Rs 60
>For the next 24 months, all revenue focus is on the B2C side and incubate the business
First Published: Feb 21 2022 | 08:30 AM IST