Dunzo Shuts ‘A Few’ Dark Stores To Optimise Cost

Dunzo Takes Convertible Notes Route For Funding, In Talks To Raise $100 Mn

SUMMARY

We shut down a few stores in peripheral areas with very low demand to drive operational efficiencies and optimise costs: Dunzo Spokesperson

The spokesperson said that the startup continues to service almost 97% of its overall customer demand

The startup declined to comment on the number of stores that have been shut down

Quick commerce startup Dunzo has shut down a few dark stores across cities to optimise cost. However, the startup has not specified the number of stores that have been shutdown.

“We shut down a few stores in peripheral areas with very low demand to drive operational efficiencies and optimize costs,” a Dunzo Spokesperson said.

The spokesperson said that the startup continues to service almost 97% of its overall customer demand.

According to an Entrackr report, Dunzo has shut down 25-30% of its dark stores in the national capital region and Hyderabad. However, the company declined to comment on the number of stores saying “it is a very small number of stores”.

“It’s a healthy business practice to focus on operational efficiencies and prune costs wherever needed, and we are confident that focusing on our high priority areas makes us a lot stronger. Our goal is to bring Dunzo closer to millions of more customers by building a strong and sustainable business that’s here for the long run,” the spokesperson added further.

Dunzo delivers groceries and various other items and allows users to send packages following a quick commerce business model. It is to be noted that Dunzo also had faced strikes from its delivery partners over change in incentive structure issue.

In the burgeoning quick commerce market of India, Dunzo competes against the likes of Zepto, Swiggy Instamart, Blinkit, among others. Although the quick commerce sector has seen new players entering the market, the profitability of these startups remain questionable.

It is to be noted that Dunzo’s consolidated loss rose 2X to INR 464 Cr in the financial year 2021-22 (FY22) from INR 229 Cr in the prior fiscal year due to doubling of expenses. The startup saw its operating revenue increase 2.1X to INR 54.3 Cr in FY22 from INR 25.1 Cr in FY21.

At the beginning of this year, Dunzo had raised $240 Mn in a fresh round of investment led by Reliance Retail Ventures Limited. It is reportedly mulling raising another $200 Mn-$300 Mn in fresh funding.