The retail arm of Reliance Industries Ltd. has invested US$240 million for a 25.8% stake in India’s online food delivery platform Dunzo to get a foothold into the rapidly emerging market of superfast dispatch of household products.
The onset of the COVID-19 pandemic has led to a boom in demand for services like Dunzo and Swiggy’s Genie in the country as people remained indoors and only online delivery of essential items was allowed. This colossal surge in demand has also led players to intensify the competition in ensuring that consumers can receive their orders in less than 15 minutes.
Grofers that offers online delivery, last month rebranded itself as Blinkit with a promise to speed up its deliveries. The platform makes 10-minutes drop-offs to consumers with the help of over 100 warehouses or partner stores in 8 cities.
Dunzo, backed by investors such as Lighrock and Alphabet Inc’s Google will be using this funding to expand to 15 Indian cities from its present 7 city operation.
Reliance Industries has been strengthening its JioMart ecommerce arm intending to strip off competition from Walmart Inc’s Flipkart and Amazon in India’s e-retail market, forecasts will be worth $200 billion by 2026.
“Reliance is getting into every key form of online retail. It is still early to gauge how this may pan out, but it looks like they aim to replicate their offline omnipresent dominance to online now,” said Bharat Birla, director at Anand Rathi Advisors in Mumbai.
In 2020, Reliance also offered mom-and-pop stores called ‘Kiranas’, where consumers could order goods on JioMart Partner with deliveries being made within 24 hours, avoiding the traditional method of salesmen representing consumer products.
The Bengaluru-based startup was founded in 2015 by Kabeer Biswas, Ankur Aggarwal, Dalvir Suri, and Mukund Jha.
Dunzo offers a hyper-local delivery app that connects the users with the nearest consumer goods delivery partner. The company offers delivery of groceries, food, medicines, pet supplies, packages and more.
Dunzo is backed by investors Google, Alteria Capital, Lighbox, Aspanda, LGT Lightstone, South Korea’s Hana Financial Investment.