stealth Startup from UniLever Pakistan

 

Unilever Pakistan embarked on a digital transformation journey in 2017 to address the direct-to-consumer (DTC) space, particularly for its Wall's business division. The company partnered with startup incubators and software development companies to explore technology solutions. Following a hackathon with NEST I/O, a startup incubator, and a joint venture with VentureDive, a software development company, Unilever launched a snack delivery app called Munchies in mid-2019.

Munchies operates as a marketplace for snacks, aiming to provide instant fulfillment within 20 minutes. The app connects users with nearby retailers and delivery personnel to facilitate quick delivery of snack products. Initially, Munchies operated on a crowdsourced fleet model but later transitioned to a dedicated fleet hyperlocal model. The dedicated fleet consists of around 300 personnel, according to a source familiar with the matter.

The app has expanded its portfolio beyond Unilever's products, listing snacking products from other companies such as PepsiCo, Nestle, and Mondelez. The decision to list products from direct category competitors is still unknown, and the initiative is still in its early stages.

Munchies currently generates revenue through a fixed and variable salary model for its delivery fleet, compensated by customers' delivery fees. The app aims to create its own D2C digital business and gather first-party customer data.

The COVID-19 pandemic had an impact on Munchies, with retailers shutting down during peak snacking order times. The app experimented with mini-warehouses to fulfill orders after store closures. The pandemic also led to negative reviews and complaints about the app, including loading speed, false advertising, pricing incentives, and limited delivery range.

Munchies faces challenges in accurately understanding inventory at retailers and tracking point-of-sale data. Currently, the platform selects stores based on the probability of the stocked products available on Munchies but does not have integrated inventory data.

Overall, Unilever Pakistan's investment in Munchies represents one of its foremost digital transformation initiatives, with the app aiming to disrupt the snacking delivery market in Pakistan. The company is focused on growing its consumer base, gaining brand equity, and creating value before building revenue and profitability models.

Despite the challenges and teething problems, Unilever Pakistan remains committed to the Munchies initiative. The company sees it as a crucial step in their digital transformation journey and a way to tap into the growing snacking market in Pakistan. They are aware of the competition and the need to establish their brand equity and gain a significant consumer base.

Unilever Pakistan believes that the Munchies app serves as more than just a snack delivery platform. It is seen as an opportunity to collect valuable customer data and establish a direct-to-consumer digital business. By owning first-party customer and transaction data, Unilever aims to gain insights into consumer behavior, preferences, and trends, which can inform their future strategies and product offerings.

The COVID-19 pandemic posed both challenges and opportunities for Munchies. On one hand, the lockdowns and store closures disrupted the demand and delivery processes. However, the Munchies team adapted by experimenting with mini-warehouses to fulfill orders during the restricted hours. This allowed them to continue operating and serving customers even when the traditional retail outlets were closed.

In terms of the app's performance and user experience, there have been some negative reviews and complaints. Users have expressed dissatisfaction with issues such as app loading speed, limited delivery range, and false advertising. However, the Munchies team acknowledges these concerns and is actively working to address them. They are focused on improving the app's functionality, expanding the delivery range, and enhancing the overall user experience.

From a technological standpoint, there are still areas that require improvement. For instance, the app currently does not have real-time inventory tracking or integration with the retailers' systems. The selection of retailers is based on probability rather than a comprehensive understanding of their inventory. Unilever Pakistan recognizes the importance of enhancing these capabilities and plans to invest in technological advancements to ensure accurate inventory management and availability for customers.

Despite the challenges, Unilever Pakistan remains optimistic about the future of Munchies. They see it as a long-term investment that aligns with their digital transformation goals and their vision to disrupt the snacking delivery market. With VentureDive as their technology partner, they are determined to overcome the obstacles, refine the operating model, and scale the business to reach a wider audience in Pakistan.