Tuesday, January 22, 2013

Rethink Dabbawallahs: Potential Business Opportunities

One big reason for Dabbawallahs’ success is its low cost delivery. The case we read was written in 2004, and customers paid between RS150-200 per month for delivery. However, inflation, labor cost and train fares increase have driven a substantial hike of dabbawallahs’ delivery charges over the past years. According to Kiran Gawande, Secretary of the Nutan Mumbai Tiffin Box Suppliers Association, in 2012, the monthly delivery rates have gone up to RS500-750, and they are planning to further increase the charge. [1]

As this trend continue, Dabbawallahs will have less advantage in cost compared to fast food chains or street vendors, and will likely to lose customers who are more sensitive to prices. Facing this challenge, what can they do to maintain a low cost delivery?

In October 2012, the makers of the film “Luv Shuv Tey Chicken Khurana” came up with a marketing strategy to promote the film through Dabbawallahs. They branded the film tag onto the dabbas. Since the film was about food, this was a perfect tie-up. [2]

Besides cost, another advantage that Dabbawallahs have is a relatively fixed group of customers. This leads to a great opportunity for using the network as an advertisement channel. Product promotion can reach to an exact type of customers everyday. If Dabbawallahs can catch such business opportunities, they will be able to maintain a low monthly delivery fee.

Who are the potential business partners for Dabbawallahs?
What are other strategies they can use to prevent a continuous increase in monthly fees?

[1] http://www.supportbiz.com/articles/top-story/mumbai-dabbawalas-hike-prices.html

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