Dunzo to rely less on dark store network, increase focus on marketplace model

AT A TIME when Reliance-backed Dunzo, a quick-commerce platform, is looking to cut costs and put itself on a path to profitability, Dalvir Suri, co-founder of the company, told FE that the startup will increase focus on sourcing products through its marketplace model, rather than fully relying on its network of dark stores.

- TUSHAR GOENKA

Quick commerce companies typically operate two broad models: a marketplace model where companies pick up products from a retail store nearby and deliver to customers as and when they are ordered, resulting in lower inventory and real estate costs but earn slim margins and give up control of the entire supply chain.

The other arrangement is when these startups operate their own dark stores where they stock up products in-house and fully control the supply chain, thereby squeezing in better margins, analysts said. In fact, Blinkit (earlier Grofers) had tried the marketplace model in its initial years but moved to an inventory-led approach (its own dark stores) around 2018, which resulted in its margins doubling to around 18%, as per reports.

Dunzo currently operates a mix of both models, where it delivers through dark stores in some areas but, through its partnerships, runs the marketplace arrangement which Suri said the company will increase focus on.