Why is Reliance Betting on Quick Commerce Despite Losing ₹1,979 Cr. to it?

Remember when we had to wait 7-10 days for a delivery? Yeah, just a few years ago, we were all glued to our "my orders" section, obsessively tracking our packages, praying they'd arrive a little early— or at least on time. The excitement of that "out for delivery" notification was real.

Then came 2-day deliveries, and we thought, "Wow, that's fast!" But now? A whole two days feels like an eternity. We want things abhi, abhi, abhi—like an errant child throwing a tantrum for a candy bar.

This race for instant gratification has given rise to a new breed of retail: quick commerce, where your order zooms through the streets and lands at your doorstep in record time. 
Of course, seeing the scope, everyone wanted a slice of the segment. Zepto, Blinkit, BigBasket, and Swiggy Instamart all started vying for your attention. And Reliance wasn't gonna be left behind.

So, it did what it does best and looked for a shortcut to enter the game by acquiring Dunzo. It was a total disaster. Think about it: when was the last time you saw a Dunzo delivery partner? 
It's almost ironic that Dunzo was the one to start the whole "get it in minutes" trend. So, how did this pioneer fail? Let's find out!

Dunzo's Rise 

Now, before we get on to the juicy bits about why Reliance chose Dunzo and why it didn't work out, we need to know the Dunzo story. It started in 2015 as a hyperlocal delivery service founded by:

• Kabeer Biswas
• Ankur Agarwal
• Dalvir Suri
• Mukund Jha 

It was just a way to get your keys back from the neighbour or grab your favourite snack when you're too lazy to leave the couch.

Turns out, people loved the convenience offered by quick commerce (no surprise there). After that, the startup's growth was on steroids. 

And by 2021, it expanded into the Quick Commerce Business (QCB). Monthly orders saw a growth of 130x in 5 years (15,000 in 2016 to over 60 lakh by 2021).

The 2020 COVID-19 pandemic was like a jackpot. While the world slowed down, Dunzo sped up. With everyone stuck at home, suddenly, everything needed to be delivered. From picking up groceries to getting that last-minute gift, the company was making convenience its middle name. 

But as they say, with great success comes even greater problems. The money started flying out just as fast as it came in. 

FY2018 to FY2021	Values in ₹ Cr.
Revenue	88
Losses	750

In reality, Dunzo was losing ₹8.50 for every ₹1 it made due to investments in growth and customer acquisition. 

However, the company wasn't done yet. It took advantage of the COVID-19 pandemic and entered the quick commerce race with Dunzo Daily promising 15–30 minute deliveries, cutting down the delivery time by half. It even managed to reduce its losses to ₹464 crore in FY22. 

So you see, Dunzo was having its time in the limelight, and its financial problems seemed like a minor setback at the time. 

Reliance wasn't just attracted to Dunzo's delivery promise, but also its robust backend infrastructure—a network of micro-warehouses and a flexible last-mile fleet.

Reliance Meets Dunzo

By 2022, Dunzo had achieved the billion-dollar evaluation. A worthy acquisition for Reliance's first attempt at entering the quick commerce market. Right? So, it bought a 25.8% stake in Dunzo for ~₹1,979 crore. 

Reliance had really thought this deal through. Here's what Isha Ambani (Director, Reliance Retail Ventures Limited) had to say

"We are seeing a shift in consumption patterns to online and have been highly impressed with how Dunzo has disrupted the space. Dunzo is the pioneer of Quick Commerce in India and we want to support them in furthering their ambitions of becoming a prominent local commerce enabler in the country. Through our partnership with Dunzo, we will be able to provide increased convenience to Reliance Retail's consumers and differentiated customer experience through rapid delivery of products from Reliance Retail stores. Our merchants will get access to the hyperlocal delivery network of Dunzo to support their growth as they move their business online through Jio Mart."

The hopes were high on both sides as you can see from Kabeer Biswas's (CEO and Co-Founder, Dunzo) thoughts on the deal: 

"Since our inception, we have been razor focused on providing an unmatched customer experience and this funding round is a resounding validation of our approach. I am proud of the team for tirelessly building this category over the past three years and grateful to our investors for their continued support. With this investment from Reliance Retail, we will have a long-term partner with whom we can accelerate growth and redefine how Indians shop for their daily & weekly essentials. We're excited by the traction and velocity that Dunzo Daily has achieved, and over the next 3 years, we aim to establish ourselves as one of the most reliable quick commerce providers in the country."

But it just wasn't meant to be. 😓

From Dunzo to 'Done'zo

This is where I tell you where things went south for the startup. It had a strong start, but let's just say it didn't know how to handle the pressure. 

It jumped from hyperlocal delivery to quick commerce, promising 15-minute deliveries (Dunzo Daily). This meant setting up dark stores, which weren't cheap. Real estate, inventory, and supply chain costs drained its cash fast. 

Then, the competition piled up. By 2021, the market was dominated by big players like:

• Zepto
• Swiggy Instamart
• BigBasket (by Tata)
• Blinkit (by Zomato)

These companies had deeper pockets and better tech. 

Company	Revenue 2022 (₹ Cr)	Revenue 2024 (₹ Cr)
Swiggy Instamart	2036	1100
Blinkit (Zomato)	236.3	2301
Zepto	140	4454
Dunzo	54	2054

While Dunzo managed to grow revenue significantly from ₹54 crore in 2022 to ₹2054 crore in 2024, it still lagged behind peers in market penetration and order density per pin code. 

Zepto’s Competitive Edge

While Dunzo was trying to juggle expansion, cash burn, and customer acquisition, Zepto played a very different game.

• It focused on fewer cities but achieved much higher density in each micro-market.
• Hit unit economics positivity earlier, especially in Mumbai and Bangalore zones.
• And most importantly, it gained stronger investor trust—despite similar loss numbers on paper.

While Dunzo spread itself thin across cities, Zepto deepened its roots where it mattered.

Dunzo tried to keep up with the India Premier League (IPL) sponsorship and marketing campaigns. The result:

• 3x business volume
• ₹100 Cr. in monthly expenses

Sure, business tripled, but losses piled up faster. So, an already struggling Dunzo thought it would be a good idea to expand from 7 to 15-16 cities because spending resources it didn't have was the solution to its problems (I hope you notice the sarcasm).

Also, unlike Zepto and Blinkit, Dunzo struggled with building repeat purchase behavior. Its high customer churn and weak subscription model meant high acquisition costs were never recovered.

Inside, things were falling apart. Co-founders and board members left, salaries were delayed for months, and there were multiple layoffs. Dunzo's losses jumped to ₹1,801 crore, and it was drowning in debt (₹600 crore) in FY23.

And the Reliance deal that everyone was so positive about? That might have been another nail in Dunzo's coffin. Lemme explain why. 

According to the law, to make any major moves, a company needs 75% shareholder approval. Reliance Retail bought 25.8% of Dunzo, which gave it veto power. 
So, in March 2023, Dunzo needed ~₹825 crore to keep going. Existing investors contributed ~75%, but Reliance refused to pitch in the last ~₹165 crore. Consequently, Dunzo couldn't complete the funding round. 

But here's what's even more interesting—this wasn't just a case of “not funding.” It was a deliberate move. By withholding the remaining ₹165 crore in a bridge round that would’ve kept Dunzo alive, Reliance essentially choked the company, without ever getting blamed.

This kind of passive-aggressive acquisition block isn’t new for Reliance. It’s part of a pattern. Think back to how it outpaced and sidelined players like Future Retail. Dunzo just became another name on that list.

So while on the surface, it looked like a failed investment… in reality, it may have been a calculated play to stall Dunzo, control its fate, and move on without the baggage.

Dunzo had ticked off all the boxes of a failing business:

• No new funding - ✅
• Big losses - ✅
• A mountain of debt - ✅
• Layoffs - ✅
• Losing promoter trust - ✅

Penniless and crushed by massive debt, Dunzo was done. 

So, Reliance did what any giant with big ambitions would do. It wrote off its ~₹1,979 crore investment in the startup as a loss and walked away to find a better way to crack the quick commerce game.

As for Dunzo, its website and app went offline, and its CEO abandoned ship to join Flipkart's quick commerce division (Minutes). 

After watching the chaos unfold with Dunzo, Reliance was like 👇

Reliance's Second Shot

And here's how:

• Grab: It acquired Grab to boost last-mile delivery. This meant quicker, more reliable deliveries.
• JioMart Express: Reliance rolled out this dedicated quick delivery platform that would deliver groceries and essentials in no time.

With 18,000 reliance retail stores across 1,150 cities, Reliance already has a great presence for quick commerce deliveries.  

The plan? JioMart Express was going to use its JioMart Partner Kirana stores as dark stores for instant grocery delivery. It wasn't chasing the 10-minute rush like Swiggy Instamart, Blinkit or Zepto. JioMart Express aimed for a more "realistic" delivery window of 30 minutes to 2 hours. 

But in 2023, JioMart Express shut down too. Another failure.

Why did it fail?
It wasn’t just market pressure—it was internal chaos. JioMart Express suffered from a lack of product assortment and a weak tech backbone. But the biggest issue? Reliance’s internal silos. The retail, e-commerce, and logistics divisions weren’t syncing well, leading to poor execution on an otherwise solid vision.

But hey, as they say, "third time's the charm". 

So, in 2024, JioMart launched its instant grocery delivery service with a promise of 30-minute delivery. It also rolled out a "Hyperlocal" section in select areas of Mumbai, Bangalore, Delhi, and a few other cities offering 1-hour delivery.

Soon enough, the 30-minute delivery service may hit 8-10 metro cities, including Mumbai, Kolkata, Chennai, Ahmedabad, Bangalore, and Delhi, with plans to spread across India.

Again, Reliance is not planning to set up any dark stores. JioMart Instant will rely on its local retail stores, Reliance Smart, Reliance Fresh, and fulfilment centres.

Company	Cities Served	Total Stores	Store Type	Dark Stores
Reliance Retail	1,150+	18,000+	Physical (Hypermarkets, Supermarkets, Reliance Fresh, etc)	N/A
Swiggy Instamart	50+	NA	Quick Commerce	500+
Blinkit	40+	NA	Quick Commerce	639
Zepto	10	NA	Quick Commerce	350
BigBasket	50	NA	Online Grocer	400+

• Market presence: While other players are confined to a few cities, Reliance is already present in over 1,150 cities. Its vast network of stores gives it a huge edge when it comes to quick deliveries.
   
• Product portfolio: Reliance offers fashion, electronics, beauty products, home appliances, and everything you need, unlike others who are content with delivering just your everyday groceries.
   
• No delivery fees: Usually, competitors charge extra fees, but Reliance doesn't charge delivery, platform, or surge fees.  
   
• Targeting untapped markets: Reliance is focusing on smaller cities and towns where quick commerce hasn't fully taken hold, going where the competition isn't and setting itself apart.

Also, Reliance is leveraging its existing customer data from Jio, Reliance Retail, and JioMart to create personalised offers, which are helping increase basket size and improve repeat purchases.

Reliance already has all the makings of a successful quick commerce business. Even with hundreds of dark stores, it'll take a while for Swiggy Instamart, Blinkit, Zepto and BigBasket to catch up to Reliance Retail's presence, as you can see in the table above. Soon, JioMart Instant will be delivering everything from electronics to fashion, accessories, and home essentials. 

To hit that 30-minute mark, JioMart's pulling in more delivery associates, teaming up with third-party EV bike logistics partners, and using its own logistics arm, Grab. So, yeah, it looks like Reliance will finally succeed this time. 

The Bottom Line

So, Reliance has been trying to get into the quick commerce business for a while. But the whole acquisition play didn't work out. It invested in Dunzo as a shortcut, but things didn't go as planned. Dunzo faced massive losses, and the deal eventually fell apart.

Then came JioMart Express. It was a bold move to rival the likes of Zepto and Blinkit. But the whole thing shut down a few months after its launch in 2023. Another failed attempt.

Now, Reliance is once again building its own quick commerce system (JioMart Instant) and is even offering hyperlocal 10-minute delivery in Navi Mumbai. 

Navi Mumbai and Thane are currently serving as the pilot zones for JioMart's 10-minute delivery experiment before it is scaled nationally.

Now, the question is, "Will Reliance disrupt the quick service segment just like it did with the telecom sector?" Maybe we should ask if Reliance has actually learned from its past missteps, or are we just seeing another repeat of the same mistakes in a different package? Let me know your thoughts in the comments!

Explore more around Reliance’s strategic hits and misses:

• Which are the Top Loss-Making Companies in Reliance?
• Reliance Companies by Profitability: Who Leads and Who Lags?