Zepto: The Buzzing Quick-Commerce Giant
Zepto is shaking things up in the quick commerce market!
As their delivery partners buzz the Indian streets, the startup too is raising funds at a lightning rate, valuation after valuation. Since its onset in 2020, the startup has become investor’s favourite in India’s grocery delivery market. While the established players like Blinkit, Big Basket, and Instamart are still leading the charge in urban centres like Mumbai and Bangalore, this ‘newbie’ made a big dent in their business.
If you are looking for an inspiring case study before you prepare your next pitch deck here it is:
The Game Plan
Zepto’s quick commerce strategies can be narrowed down to Three Big Moves.
- The Pivot
- Dark Stores
- Tech Savvy Operations
The Pivot: From KiranaKart to Zepto
Zepto wasn’t always Zepto.It started as KiranaKart, but the founders quickly pivoted their pitch with a new approach: ultra-fast grocery delivery in just 10 minutes. The name “Zepto” (a tiny unit of time) perfectly captures their speed-driven mission. The startup in fact achieved its Product Market Fit even before it was built.
And, that hit the deck!
Dark Stores: Mini-Warehouses for Mega Speed
Instead of relying on big warehouses, Zepto used small, strategically located dark stores. These are mini-fulfilment centres that keep products close to customers. Making those speedy 10-minute delivery promises possible.
Tech-Savvy Operations
Also, Zepto’s tech game is agile and strong. With their initial funds the company developed advanced algorithms that helped them streamline everything from inventory management to delivery routes. The tech-driven approach ensured that orders are fulfilled efficiently and tailored to customer preferences.
The Challenge
Standing Out in the Crowd
Blinkit (backed by Zomato), Big Basket (owned by Tata), and Instamart (from Swiggy) have strong brand recognition, deep pockets, loyal customer bases and a perennial fundraising journey. They can throw big marketing campaigns and offer tempting deals to keep customers hooked
Zepto’s Response: Through innovation and by concentrating the efforts on a few key cities with high store density, Zepto was able to more consistently deliver on its promise of speed.
Profitability vs. Growth
The ultra-fast delivery model is a hit with customers but doesn’t come cheap. Despite skyrocketing growth, Zepto faced a net loss of ₹1200 crores in 2022. They’ve got 200 out of 360 dark stores in the black, but the pressure to keep delivering in just 10 minutes is tough on the wallet.
Zepto’s Response: By increasing the number of profitable dark stores and fine-tuning their supply chain, they managed to control costs better. They had to rely heavily on discounts and promotions.
Zepto was juggling explosive growth with the quest for profitability.
Logistics and Supply Chain
Any hiccup in logistics can lead to delays and unhappy customers. So the dark stores need to be stocked just right, and deliveries must be spot-on.
Zepto’s Response: They implemented advanced algorithms and real-time data systems to streamline inventory management and dispatch processes.
Results:
Zepto has made a big splash in the quick-commerce market, grabbing 13% of the pie in just their first year. That’s pretty impressive, especially when you’re up against well-funded competitors. Their focus on delivering groceries in just 10 minutes has helped them carve out a significant market share.
Zepto’s revenue growth has been nothing short of jaw-dropping. In 2023, their revenue skyrocketed by 1362%, hitting around ₹2000 crores. They also reached over $1 billion in Gross Merchandise Value (GMV) in just 2.5 years. That’s a clear sign they’re hitting all the right notes in terms of market penetration and customer acquisition.
Key Takeaway:
Zepto’s quick rise in India’s grocery delivery startup scene shows one of the important approaches to overcoming tough challenges in the space i.e., by sticking to the basics (of fast deliveries) and investing in smart technology, you can make a dent in the market and, it doesn’t matter who you are up against -
Like, in a classic David vs. Goliath story.
Zepto: Latest Buzz
Zepto’s valuation has recently soared to an impressive $5 billion. This significant increase highlights investors’ growing confidence in the quick-commerce sector and Zepto’s ability to capture the market’s attention. It will be fascinating to see how it leverages this newfound financial strength to achieve its ambitious goals and maintain their position as a leader in the quick-commerce market.
