How does Dunzo win?
Most strategy posts/frameworks are written to explain why a company was successful and not how it can win in the future. Easier to explain why Uber became successful; Far harder to use the same frameworks to lay out a path for UberEats to win vs DoorDash.
I am a big consumer of strategy porn myself.
This thought came to me late night yesterday when I was thinking about how Dunzo would hypothetically beat Swiggy (Swiggy Daily + Genie + Instamart). Assume you can use any of the frameworks mentioned in the post. Take your pick: Blue ocean, 7 powers, Porter’s forces. Draw flywheels, loops, business equations. Then come up with a plan.
The Plan can’t be: Raise money from Softbank/Tiger Global or sell to Zomato.
- You are competing in a low margin industry with the on demand market leader who can set up incentive structure for drivers and leverage them to serve far more use cases.
- All your features can be copied in a month/ product can’t be moat.
- Customers won’t pay brand premium as their is no signalling value and what you are providing is a utility.
- As long as they can trust the service to some level they will always go with the cheaper option. Swiggy can extend Super for all competing services in the future.
- Let’s face it our middle class is stagnating, small as well as poorer compared to say the US and China. Even if you cut down delivery time from 40 to 10 mins, you can’t extract more price from customers. You will eventually exhaust the TG that can pay 60-70 Rs to get milk/bread.
- Swiggy probably has much more customer data. They know which person ate 1000 last night on pizza and won’t need a voucher for grocery delivery. They can cross sell easily. Long term for them the goal would be to increase the portion of users who use all Swiggy services.
I can go on and on, but you get the point.
Only case I have seen of a startup winning vs a larger player is Doordash. They beat both UberEats and Grubhub by focusing on suburbs, through exceptional operating excellence/focussing on the tiniest details, and a key insight that: beyond a certain point delivery time does not matter. While everyone was burning money to reduce the delivery time, Doordash focused on increasing the inventory of restaurants.
(Okay maybe exploiting tips too, but we will ignore that.)
Coming back: How does Dunzo win?