Zepto is your next-door quick commerce app that delivers groceries in 10 minutes. What started as a WhatsApp group to actually serve the next-door neighbors in the pandemic then became ‘Kiranakart’. Earlier the delivery was limited to Mumbai but when the company got its identity as Zepto, it started offering delivery in tier-1 metro cities such as Delhi, Chennai, Bengaluru, Hyderabad, Kolkata, Pune.
Aadit Palicha and Kaivalya Vohra, the 19 year old founders started by delivering themselves, today they own about 315 dark stores and 100 micro-warehouses. The company became the first unicorn of 2023 by attaining a value of $1.4 billion. In a recent article by the Economic Times, the company is in talks to raise $300 million at a valuation of $2.5-3 billion.
Zepto cracking the business model
They introduced the 10-minute delivery concept intending to provide convenience and reduce hassle for people amidst today’s hectic schedules. Its fast delivery model is possible because of the hub-and-spoke system. Hub refers to the central unit where goods are stored and spoken is the distribution of goods to the customer. Its warehouses are strategically placed to minimize the delivery time and they possess an efficient supply chain. The brand claims its median delivery time as 8 minutes and 47 seconds.
The revenue model of Zepto is three-fold. They make money through charging commissions from customers and grocery stores, through subscription and membership plans, and finally through advertisement.
When the founders were delivering goods themselves in covid they got feedback from customers saying they are only availing services because of the pandemic but won’t be using this once it is over. The Stanford dropouts decided to turn things around. In 2023, the market valuation of online groceries in India touched 669 billion INR and quick commerce is only 10% of it.
Zepto growing with Blinkit & Instamart
Zepto became a pioneer in the industry and made people believe in the growth of it. Deepinder Goyal acquired Blinkit (formerly known as Grofers) in June 2022 for $569 million. A high price to pay for a business that burned higher cash. He came prepared though and things turned around. Blinkit went from burning Rs.150/order to Rs.15/order. Its valuation went from $569 million to $8 billion.
In an interview with Forbes, the Zomato founder said, Blinkit will be bigger than Zomato. He also added that the fast delivery model has made him impatient to wait for 30-40 minute delivery on Zomato.
Quick commerce startup has unimaginable growth potential and it is being recognized. Post Covid the Q-commerce landscape changed completely and disrupted a fast-paced world. The industry grew rapidly.
Today companies like Swiggy Instamart, Blinkit, Dunzo and others are in an intense battle for supremacy and constantly working on decreasing their delivery time. However, such business models make workers fight for their lives as they jump traffic lights and take risks to make it on time.