Swiggy, Dunzo open doors to dark stores to go hyperlocal

MUMBAI: Food delivery company Swiggy and personal concierge startup Dunzo have both tied up with wholesalers that run dark stores to do hyperlocal deliveries, three people aware of the companies’ operations said.

Dark stores are establishments that are located far away from High Street locations and often do not cater to walk-in customers.

Hyperlocal deliveries, such as the ones that Swiggy and Dunzo attempt, are completed in two ways — through dark stores and in partnership with retail stores.


Swiggy and Dunzo have tied up with wholesalers for the first, while they have teamed up with Jumbotail for the second.

The B2B startup is a tech-based bridge between food processors, FMCG distributors and small kirana (corner) stores across Bengaluru. Jumbotail also gives these stores a Point of Sale (PoS) machine, thereby getting access to the kirana stores’ inventory.

Dunzo and Swiggy plug into Jumbotail’s system and create partnerships with these retailers. Both these companies need such partnerships to get better margins from stores. “Jumbotail is working on multiple initiatives to help kirana store entrepreneurs increase their revenues by leveraging the power of its technology platform,” said Ashish Jhina, cofounder, Jumbotail.

Swiggy, meanwhile, said it does not run dark stores, but partners with some of them.

“We identify entrepreneurs and wholesalers who want to become retailers (and) intend to empower them to go online and offer their products to consumers across the city,” said a Swiggy spokesperson.

A detailed email sent to Dunzo elicited no response.

“They have had to resort to dark stores because these companies often do not have insight into kirana stores’ inventory,” said one of the three people mentioned earlier.

If Swiggy and Dunzo do not have access, and a customer places an order which is unavailable at a partner store, the delivery person will have to buy it at full price from another store or call the customer to ask for an alternative. “Either way, it will get expensive and Swiggy may not be able to deliver the complete order,” the person added. Eventually, Swiggy will try to run its cloud kitchens near these dark stores to cut down on redundancies and promote batching. “But that is still six months away,” said one of the people mentioned above.