Unlocking Dunzo's $800M Growth Playbook

Founded in 2015, Dunzo began as a simple WhatsApp-based service, helping people get things done, whether delivering groceries, picking up packages, or running errands.

Over the years, the company has evolved into a full-fledged app that delivers everything from food to medicines, household items, and even personal errands.

With a focus on speed, convenience, and customer satisfaction, Dunzo quickly gained popularity and became a household name in major cities.

Today, it stands as one of India’s most successful and innovative startups in the quick-commerce space, always evolving to meet the needs of its urban customers.

Wait… How did Dunzo become so well-recognized in a short time?

What GROWTH HACKS did the internal team of Dunzo adopt?

Let’s see!

What and how did Dunzo do it?

Innovative and customer-centric strategies fuel Dunzo's growth, helping the brand stand out in the competitive on-demand delivery market. Below are some of the key hacks that contributed and how they implemented them to its rapid scaling:

1. Referral Program with Double Incentives

One of the core tactics Dunzo used was a referral program to benefit both the referrer and the referee. Each person who referred a friend received a discount, and the friend also got a discount on their first delivery.

This encouraged users to share Dunzo with friends to create a viral loop of new user acquisitions. The brand also saw a 20% increase in app downloads within three months of launching the referral program in 2018.

How did Dunzo work on this?

They implemented this referral program as a core part of their user acquisition strategy. Initially, they promoted through simple in-app notifications, emails, and social media posts.

Users could send referral codes directly with the program designed to be easy to share. As the user base grew, Dunzo scaled this tactic by:

• They customized offers to incentivize specific behaviors like ordering from a new category in different cities and user segments.

• They automated the tracking and rewarding of referral bonuses, for a seamless experience for new and existing customers as customers grew.

After automating its referral system and personalizing offers, Dunzo’s referral-driven downloads increased by 35% from 2018 to 2020.

Here’s a screenshot of the terms and conditions of a referral program by Dunzo:

2. Hyperlocal Focus for Faster Deliveries

Rather than spreading out resources over many locations at once, Dunzo started small by targeting specific areas of cities. This hyperlocal strategy allowed them to deliver more efficiently and with fewer logistical issues.

The brand ensured deliveries were quick and reliable. By focusing on just three areas of Bengaluru in its early stages, Dunzo reduced delivery times by 30% and achieved 95% customer satisfaction.

How did Dunzo set itself ahead in the crowd?

Dunzo's initial hyperlocal strategy targeted only a few densely populated neighborhoods in Bengaluru. By starting small, Dunzo controlled quality and built trust with early adopters.

To scale this strategy, Dunzo:

• Instead of spreading its resources thin across the country, Dunzo expanded into new regions only when there was clear demand, such as from local requests or high app downloads.

• They invested in AI-driven route optimization tools that helped their delivery partners complete tasks faster and with fewer errors. This efficiency made scaling smoother and less resource-intensive.

• As Dunzo moved into new areas, it quickly onboarded local vendors, personalizing their offerings to the specific needs of each locality (e.g., medicine delivery in regions with older demographics).

Can you believe by 2020, Dunzo reduced delivery times by 25% and cut operational costs by 15% through its AI-driven logistics tools?

Here’s a YT video of a customer showing the condition of groceries delivered by Dunzo:

3. Partnerships with Local Vendors

Dunzo wasn’t just about food delivery. It took a unique approach by partnering with local grocery stores, pharmacies, and small, independent shops.

This allowed them to offer various delivery services, from groceries to medicines, making the app a one-stop shop for consumers.

Unlike its competitors, Dunzo began by focusing on everyday needs beyond food, which opened up new revenue streams. By 2021, 40% of Dunzo’s deliveries were non-food items. It helped them stand out in the market.

How did Dunzo achieve this?

They began the vendor partnerships with a few local grocery and convenience stores in its early markets. The platform allowed these vendors to gain visibility and serve a growing customer base without investing in their delivery infrastructure.

By 2022, Dunzo partnered with over 20,000 local vendors across its service areas, contributing to 45% of its total transactions.

To scale this tactic:

• Dunzo simplified the onboarding process for new vendors with easy-to-use tools to track orders, manage inventory, and deliver products on time.

• In some regions, Dunzo secured exclusive partnerships with well-known vendors. These partnerships brought in more users and provided vendors with increased business.

Check out this video by Dunzo sharing funny conversations with its partners:

4. Gamified User Engagement

Dunzo introduced gamification elements within its app to drive users to complete certain actions in exchange for rewards, discounts, or badges.

Users could unlock badges, earn points, and receive rewards for getting some tasks done like repeating orders or trying new delivery categories.

These Gamification features boosted customer retention by 20% in 2020. This shows how engaging users can lead to long-term loyalty.

To scale gamification:

• Dunzo’s system became more refined as it grew. For instance, frequent grocery shoppers would receive grocery-specific rewards, while those ordering pills could get pharmacy-related discounts.

• Dunzo also ran limited-time gamification events around festivals and sales periods to encourage more orders during peak times.

Check this small video by Dunzo introducing the gamified elements in one of the app’s features - order tracking:

5. Social Media Campaigns

Dunzo’s social media presence was different from its competitors. The brand leaned on humor, memes, and relatable content, making it a hit with a younger audience.

Their quirky posts stood out, often going viral and giving the brand free organic visibility. A Dunzo meme campaign in 2019 increased their social media following by 50% within two months.

Here's what Dunzo does to look fresh:

• Dunzo’s social media team often uses pop culture references and trends to make their content highly shareable.

• They create region-specific campaigns. For example, they refer to local festivals and cultural nuances to make their content more engaging.

• The marketing team always jumps on trending topics, memes, and viral challenges. These posts get shared widely and help build a fun, approachable brand image.

• They actively encourage users to share their experiences on social media. From funny delivery moments to success stories, user-generated content helped the brand gain trust and authenticity.

So, here’s a cool post by Dunzo on Facebook focused on Moment Marketing:

Here’s a hashtag challenge by Dunzo on X (Twitter) asking people to stay home while Dunzo did all the shopping:

Don't you think Dunzo is unique in all aspects compared to most other startups?

While many brands hop onto SEO and content and micro-influencer marketing just as they enter the industry, Dunzo focused on something that many companies didn't enter (or should I say didn't dare?), referral marketing.

Many think people use referral links only to get the referral gift and then leave. This drives many away even today. While that could be true, Dunzo already had some plans, gamification features to retain the lost customers.

Results

• Dunzo’s user base grew from 1 million in 2018 to over 7 million by 2021 because of its hyperlocal focus and viral marketing strategies.

• As of 2022, Dunzo was handling over 2 million transactions a month, with an average of 60,000 daily orders.

• Dunzo made over ₹100 crore (approx. $13.5 million) in 2021, and as of 2023, it has raised over $240 million in funding, with its valuation crossing $800 million.

• Dunzo is now working in 8 Indian cities, including Bengaluru, Mumbai, Pune, Chennai, Hyderabad, and Delhi, with plans to enter more tier-2 cities.

• Dunzo launched its 19-minute grocery delivery service, ‘Dunzo Daily,’ to compete with the growing quick-commerce market.

• By 2020, Dunzo achieved a 60% customer retention rate, with users returning to the app for non-food deliveries.

Conclusion

Dunzo’s success shows how strategic growth hacking helps in evolution. It grew from a small, WhatsApp-based service to a household name in India by tapping into referral loops, hyperlocal strategies, vendor partnerships, gamification, and social media trends.

Implementing creative strategies and focusing on customer-centric approaches can help achieve target growth and build a loyal user base.