With this evolving world and the changes the technology brings in society is truly impressive and surprising. Tech has changed so many things in our life which also including the way we shop online. Now people can shop for groceries and electronics online and it is delivered to your doorstep in just 10 to 15 minutes. This is all possible because of quick commerce and one of the quick commerce apps that is famous in India is Zepto. In this blog, we are going to learn about Zepto and How Zepto Works? And Zepto warehouses. So make sure to read the blog till the end of it.
What is Zepto?
Zepto is an Indian quick commerce company specializing in ultra-fast grocery delivery, often within 10 to 15 minutes. The company was founded in the month of July 2021 by Aadit Plicha and Kaivalya Vohra. The app primarily works in urban centers which spread across India, leveraging a network of dark stores. The company is known for offering a large number of products on their application. These products are like electronics, music, food and more spread over 50 cities across India.
The Story Of Origin Of Zepto
The vision to start Zepto is simply to deliver groceries to people in just 10 minutes when India is going through a lockdown situation. Both Aadit Palicha and Kaivalya Vohra were students at Stanford University USA. Along with it they also childhood friends of each other and very young people to start the company. In 2020 they came back to India after dropping out from the university. They saw the market gap between the society and traditional grocery system in India during the pandemic.
Before Zepto they launched a platform called KiranaKart which aims to deliver groceries in 45 minutes at your doorsteps. Soon they realised that they needed to create a most effective way to robust their business model to achieve much faster delivery. That’s when they launched Zepto with the promise of delivering groceries in just 10 minutes. They chose the name “Zepto” for their company because it derived the “shortest unit of measurable time in Physics”.
Now the company has also launched their 10-minute food delivery service called “Zepto Cafe”. This venture promises to deliver food and snacks in just 10 minutes to your doorsteps. This is now their next step in the market and now they are continuously growing.
How Zepto Works As A 10 Minute Delivering App?
Zepto is a 10-delivery app operated with several key strategies. Here are these several key strategies to know about:
- Dark Stores And Micro-Warehouses: This application uses a network of dark stores and micro-warehouses located close to urban areas. These facilities are not open to the public and serve only online orders, reducing delivery distance and times.
- Proximity To Customers: By Placing warehouses near target customer bases, Zepto Minimizes delivery distances, ensuring faster delivery times.
- Optimized Inventory: Zepto Curates its inventory to focus on high-demand products, streamlining order fulfillment and the process of packaging.
- Efficient Logistics: The employs AI-powered routing, automated packaging systems and also a delicate delivery fleet equipped with real-time tracking to expedite deliveries.
- Hub-And-Spoke Model: As a 10-minute delivery application they use a hub-and-spoke model system to manage its logistics efficiency.
The Model Of Zepto Warehouse
Zepto’s warehouse operations are designed to support the ultra-fast delivery model of their platform. Here is how the warehouse system works:
- Strategic Partnerships: As a 10-minute delivery app it collaborates with logistics companies like NX Logistics India to establish advanced warehouses. For instance, they have also set up a large facility at Samudra Logistic Farms in Bangalore. This is part of their strategic plan for their warehouse planning.
- Efficient Infrastructure: The Warehouses are equipped with cutting-edge and new-age technology in the infrastructure. All of this is to support efficient storage and logistic operations. They utilize data analytics to optimize workflows and strengthen the supply chain of the applications.
- Operational Efficiency: Zepto uses multiple applications like Zepto Warehouse to streamline packing processes for packers, enhancing the productivity of their applications. This also helps us to smoothen the process of their delivery operations.
- Location And Accessibility: Most of their warehouses are in locations that are nearby to the various transportation facilities. This is because to make sure that there is no hurdle in the process of their delivery.
Revenue Model Of Zepto As A 10 Minute Delivery Application
Zepto as an application earns money through many sources. These sources are:
Commissions As Delivery application Zepto earns money through commission by marking up product prices and charging a percentage of the total order value from grocery stores.
- Delivery Fees: The Company charges dynamic delivery fees which is based on the size of the order and distance of delivering specially in the peak hours. It also offers subscription models for the ultimate free delivery over the order of more than 100 rupees.
- Venture Partnerships And Advertisement: Another source of their earning is through advertising fees which they charge on their platform to prefer certain brand products to their customers.
- Data Monetisation: Another big source of their earning is data monetization. To understand consumer behavior and pattern they deliver their data to another third-party source.
Shares And Investment Of Zepto
The zepto’s shareholding and investment is well structured and planned. Here this structure is as follow:
Shareholders
- Founder: Both Aadit Palicha and Kaivalya Vohra own only 18% of the whole company and the rest is owned by others which we are going to discuss in the below part.
- Indian Shareholders: More than the value of 30% stakes is owned by different Indian stakeholders. The list includes big companies like Manipal group’s Ranjan Pai and Mankind Pharma’s Ramesh and Rajeev Juneja
- Foreign Stakeholders: Nexus Venture Partner owns 18.60 percent of the total shares, Glade Brook Capitals owns 10.30% of the total shares, stepsStones group owns another 9.80% of the shares and others.
Investments
- In total Zepto has raised over $1.95 billion rupees in funding from overall 64 investors over the period of time.
- Recent round raised by them includes a $350 million investment led by Motilal Oswal’s Private Wealth Division.
- The company is valued at $5 billion and plans to increase domestic shareholding ahead of a potential IPO.
Growth And Market Presence Of Zepto
As a service provider Zepto has established itself as a strong company in the market and seen a good amount of growth in some recent years:
Growth Over The Period Of Time
- Revenue Growth: The revenue of the company more than doubled to rupees 4,454 crore in Financial year 2024 from 2,025 crore in the financial year 2023.
- Expansion Of Dark Stores: The company has expanded the number of dark stores from 300 in 2023 to 900 hundred in 2024. After it they now are aiming for 1,000 stores in the coming 2025 year.
- Gross Order Value: They have achieved $3 billion in annualized GOV, up from $550 million January 2023.
Market Presence In Current Time
- Operational Cities: The company expanded itself from 7 cities in 2023 to now 35 cities in 2024.
- Daily Order Value: They have been receiving 1.1 to 1.3 million orders on a daily basis across all over india.
- Product Diversification: Initially the brand was only selling groceries items, but now they have tons of variety of products in different categories on their platform.
Future Goals Of The Zepto As A Company
Here are few of the future goals of Zepto on which they are going to work as a brand in the coming time:
- Expansion And Operational Reach As we discussed above, the company currently runs 900 dark stores across India. They wanted to expand this number and wanted to expand these dark stores in Cities like Nasik and Chandigarh. Talking about operational reach, they Plans To deepen it presence in big major cities of India in the coming time
- Product Diversification: They are also planning to bring more such products which are out of the category of groceries. They are planning to bring more clothes and electronic items on their platforms.
- Cafe Service: As we all know now they also opened their 10 minute food and snacks delivery service. Through this service they also wanted to generate a profit of over 1000 crore Indian Rupees until the end of 2025.
Some Potential Competitors Of Zepto
Here are few of the potential competitors of Zepto which shares a good amount of share in the market along with him.
- Blinkit : The brand was formally launched as grofers before being acquired by Zomato. It is one of the strong competitor of it which also offers their delivery services in less then 10 minutes.
- Swiggy Instamart: This is the part of Swiggy, instamart provides fast delivery services of groceries and other essential products or other essentials. This is also one of the direct competitors of Zepto.
- Flipkart Minutes : This is a new venture which is launched by Flipkart which it launched in the market as a competitor of Zepto and others. Through this, Flipkart directly enters into the quick commerce business.
Conclusion
After the arrival of Zepto in the market, it shaped the way a consumer shop grocery. Now through it you can deliver everything at your doorsteps in just 10 to 15 minutes. However, it is very interesting to see how this company will evolve with the needs and demands of the consumer in the coming time.The above blog is based on the research about Zepto on the internet and other sources so we cannot recommend to just rely on the information provided by us. Please conduct your own research about the topic on your own.
