The grocery delivery business is booming, and it’s only getting bigger. More and more consumers are turning to online shopping for their groceries, and that trend shows no signs of slowing down. The Indian grocery delivery business (Zepto Business Model) is expected to be worth USD 2.9 billion by 2020 and to grow at a compound annual rate of 37.1 percent from 2021 to 2028. But Swiggy Instamart, Blinkit, BigBasket, and Amazon Fresh are already ahead of the game.
Even after such fierce competition, Zepto quickly becomes many people’s go-to grocery delivery service. Not only is it incredibly fast, but it is also very convenient. Zepto delivers groceries to your doorstep in less than 10 minutes, which is much faster than other delivery services that can take up to 30 minutes. So how does Zepto manage to be so fast? The answer lies in its efficient business model and dedicated team of employees. Keep reading to learn more about Zepto and how it revolutionizes the grocery delivery industry.
About Zepto?
Mumbai-based startup Zepto has made a name by providing a 10-minute grocery delivery service. Aadit Palicha and Kaivalya Vohra founded Zepto to make quick grocery delivery more accessible. In 2021, Zepto delivered more than one million orders in collaboration with 86+ dark store owners across the country. Zepto’s network of “cloud shops” or “micro-warehouses” allows the company to fill orders quickly and efficiently.
Zepto has been thriving thanks to its proficiency in producing more than 7,000 items in 20+ categories for delivery in less than ten minutes. That focus has allowed the company to expand while maintaining exceptional customer loyalty. The Parel-based grocery delivery business has reduced the time it takes to deliver groceries to only 10 minutes, thanks to the dark store concept. Rapid commerce is the next ample opportunity the grocery delivery industry wants to grasp.
The Mumbai-based startup Zepto has had a fantastic customer response in the markets it currently operates in (Mumbai, Delhi, Bengaluru, Gurugram, and Chennai) and is about to venture into (Hyderabad, Kolkata, and Pune).
About the Founders:
- Aadit Palicha and Kaivalya Vohra, both 19-year-old childhood pals, created Zepto after walking out of Stanford University‘s renowned computer science department to return to their home, India, and start a business. The firm was founded in September 2020 year and began operations in April of the year 2021.
- Aadit Palicha, the CEO and Co-Founder of KiranaKart and Zepto, is no stranger to startups, having founded his first one when he was 17. After completing an IB diploma in Mathematics and Computer Science from GEMS Education, Palicha got his Bachelor’s in Computer Science from Stanford University. He then completed Y Combinator Grade: W21 and started with PryvaSee as a Project Lead. In April 2020, he left GoPool to start KiranaKart and Zepto.
- Kaivalya Vohra, the Co-Founder and CTO of KiranaKart and the Co-Founder and CTO of Zepto, is a Stanford University graduate in Computer Science. Vohra went through Y Combinator with Aadit, and their company Zepto now has 51 to 200 employees.
Business Model of Zepto?
Zepto business model is based on the “dark store model.” This involves setting up warehouse-style stores in residential areas that are only accessible to delivery drivers. The stores contain a range of products, and customers can only order via the Zepto India app or website.
Zepto currently has over 340 dark stores in various locations. While dark stores are designed for instant deliveries, they can’t always handle high sales volume. But Zepto didn’t want to compromise on quality or service, so they developed an AI-powered system that helps with the picking, packing, and delivery process. This system ensures a smooth transition from picking to packing to delivering, making it possible for Zepto to offer a wide range of products at the best possible price.
The advantages of Zepto business model are that it enables Zepto India to offer a speedy delivery service, as the stores are located close to customers’ homes. It also means that the company can operate with a smaller workforce, as there is no need for staff to use the store.
Benefits of The Zepto Business Model
Contactless Approach:
No-contact shopping has been a critical factor in businesses adopting the ‘dark store’ approach. Dark stores allow consumers to purchase groceries without contacting others or entering a physical store. They place online orders and get them instantly delivered.
Increased Customer Base:
The Dark stores bring distribution centers closer to consumers, which broadens the customer reach for these platforms. The stores are always online and ready to take orders, which makes them more attractive to consumers.
Inventory and Product Assortment:
Zepto’s dark stores are designed for easy navigation and packing so that they can fulfill orders quickly and efficiently. Thanks to Zepto’s AI-powered tools, inventory and product assortment can be easily managed and monitored. This results in improved inventory control and a better overall product assortment.
Efficient Distribution:
Zepto’s dark store enables it to fulfill orders faster and more efficiently. Micro and cold warehouses provide several distribution alternatives and physically bring groceries closer to a particular market segment. This way, Zepto has more control over the market delivery system.
How does Zepto Make Money?
Zepto Grocery app India makes money by charging a small commission on each order placed through the app. This commission is around 2-3% of the total order value and helps cover the costs of running the app and ensuring that customers have a positive experience.
“Zepto has raised a lot of money over the years – over $560 million in over 4 rounds. Their most recent funding round, Series D, was held on May 2, 2022, and raised $200 million. This puts them well on their way to reaching a unicorn valuation. As of May 3, 2022, the company is valued at $900 million. The Zepto seed funding was led by Contrary in September 2020 and in June 2024 Zepto raised $665 million“.
Zepto business model has seen some severe growth recently. In the last quarter, their revenue grew by 800%, and their burn rate per order decreased by five times. This kind of growth is attributed to Zepto boasting 50% growth each month. If this trend continues, Zepto could see itself making $1 billion by next March.
What is Unique About Zepto Business Model?
- Zepto’s business strategy is all about providing quick service to customers. Yet, Zepto offers several marketing elements that differentiate it from its competitors. Still, the model also takes these into arrangement.
- Zepto’s free shipping makes it more appealing than companies like Instacart and Amazon Fresh, which charge a delivery fee.
- Zepto is all about speedy delivery – according to their website, they have a median delivery time of 8 minutes and 47 seconds. That’s pretty quick!
The company founders state that it’s already being sent out for delivery by the time a customer has verified their order. Plus, almost all orders are completed in less than 10 minutes. However, a small percentage of orders – 1% – may take 15-16 minutes or longer.
What does Zepto do?
Zepto is a startup based in Mumbai that offers a 10-minute grocery delivery service. This convenient service is perfect for busy people who don’t have time to go to the store.
How many people use Zepto?
The Zepto app is top-rated- over 10 million people use it for grocery shopping!
How does Zepto make money?
Zepto is known for delivering groceries before the turn of the year. In 2021, it worked with 86+ dark store owners in thirteen different areas and generated over one million deliveries. Zepto employed its network of ‘cloud shops’ or micro-warehouses to fulfill orders promptly.
Who created Zepto?
Zepto was set up just over a year ago by Vohra and Aadit Palicha, classmates and friends at the age of 19. The company started operations in Mumbai in April 2021 and has seen tremendous growth.
Who is the CEO of Zepto?
Kaivalya Vohra is the co-founder of Zepto and the youngest self-made millionaire in India. At just 20 years old, he is already the CEO of his own company.
When was Zepto started?
Zepto was founded in April 2021.
What is the Tagline of Zepto?
Zepto’s tagline is, “Groceries delivered in 10 minutes.” You can order your groceries online, delivered to your door in 10 minutes or less.
How much is Zepto worth?
Zepto is worth $900 million. But it’s not all that surprising when you consider their track record. Zepto has been highly successful in the industry, and they continue to grow.
What is unique about Zepto?
Zepto is the fastest grocery delivery service, and it’s also one of the fastest-growing startups. Zepto promises to deliver groceries to your doorstep in less than 10 minutes.
How old is Zepto?
Zepto is about one and a half-year-old company.
Conclusion
Zepto has raised $100 million in Series C funding, led by Y Combinator’s Continuity Fund. The company is now valued at $570 million.
The founders claim that the new acquisitions will help Zepto reach consumers and provide better service. As of now, Zepto functions in Indian metros. Regardless, it has not revealed its consumer calculation, but sources say Zepto is expanding at 200% every month.
It takes a lot to be successful as a company, and Zepto has it all. They have a great team, are focused, and execute quickly. They also timed their entry into the grocery delivery space perfectly. Even though they’re only a year and a few months old, they’ve already raised customer expectations and are moving towards a more consumer-centric business model.
Read also: Business model of Bharatpe.
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