Zepto Business Model: How Grocery Delivery Startup Works and Make Money?

Zepto Business Model

Zepto Business Model: How Grocery Delivery Startup Works and Make Money?

Online grocery delivery gained massive popularity in the pandemic era. The primary driver of the online grocery delivery business is shifting customers’ behavior; customers these days are more likely to purchase online. This has resulted in attracting many delivery businesses like Zepto to launch their delivery service and cater to customers’ growing needs with faster delivery. If you’re looking to jump into the market, then understanding the Zepto business model can help you a lot with it. Read the blog to find everything here.

The grocery delivery business is growing in terms of involvement, financial commitments, and attention. However, in 2020 the online grocery market in India was valued at 2.9 billion in 2020. The market is projected to grow at 37.1% of the CAGR between 2021 and 2028. The online grocery market has gained immense traction over the years due to customers changing lifestyles, the tech-savvy generation shifting shopping habits, and growing urbanization.

Zepto Business ModelSource: (Grand View Research)

There are lots of delivery companies such as Instamart, Swiggy, BigBasket, Blinkit, Amazon Fresh, and many more. Due to tough competition, if you are wondering, is there room for new startups to launch their venture? The answer is yes. 

You might have heard about Zepto, which launched in April 2021 and has gained immense popularity. Let’s have deep insight into a Zepto business model, what it is, how it works, and make money right here.

What is Zepto?

Zepto is a faster-growing grocery delivery platform in India. The company promises less than 10 minutes of delivery to customers’ doorsteps. But how does a quick delivery company work to provide the best experience? Unlike other grocery delivery platforms, which deliver in 30 minutes, the Zepto business model helps the company to deliver the daily essentials within 10 minutes.

Success Story of Zepto to Dive into!

Kaivalya Vohra and Aadit Palicha, Stanford University dropouts, founded Zepto in April 2021. The quick commerce startup is looking forward to launching pharmacy delivery services online. It is a category we will be excited to enjoy on the Zepto platform in the future.

Zepto Business Model

Aadit Palicha, the Zepto founder, said, “there are a lot of innovations that are required to be done in the digital space. It’s something we will find in the medium to short to long term. Zepto has raised more than $200 million in a new financing round as it scrutinizes to expand its 10-minute delivery service to more Indian cities and expand its network of dark stores.

Existing backer Y Combinator led Zepto’s Series D round, valuing the Mumbai-based startup at $900 million, up from $570 million in its Series C round as well as $225 million in a round unveiled in 2022. The size of an order placed on delivery services is about $6 in India, then $12 to $15 for traditional online grocery orders.

size of an order placed on delivery services

Source: (Techcrunch)

A Mumbai-based startup, Zepto operates instant grocery delivery services, which has doubled its valuation to $570 million, raised from $225 million less than two months ago as it extends into newer cities. Nexus, Lachy Groom, Glade Brook, Breyer Capital, Global Founders, and Contrary Capital also participated in the round, which drove its to-date increase to $160 million.

The Indian startup, Zepto, has captured immense interest from the local startup community as more individuals began voicing their opinion about the business. Zepto uses mathematical terms to define its business and delivers a ten-minute grocery delivery service, a category that is hot in various parts of the world.

Seeing the growing demand for instant Grocery delivery, BlinkIt and Swiggy has also entered into the same business. If you’re also looking to give a digital touch to your traditional grocery delivery business with an app similar to Zepto, White Label Fox is here to help you. 

Get insight into working for an on-demand grocery delivery app. Also, don’t miss checking the features and modules that make your grocery delivery business activities easy and speedier than ever before.

Zepto Business Model: How Grocery Delivery Giant Provides Instant Service?

The Indian e-grocery market is predicted to reach around $24 billion by 2025. Online grocery penetration is forecasted to get 3 to 5% by the same period, which was less than 1% in recent times. Long-term structural drivers include lower tier consumption, rising income, eCommerce penetration, increasing affluence, and young population demand.

Online grocery penetrationSource: (Consultancy)

The Zepto business model is developed by a couple of teenagers keeping top instant grocery players at the center focus. The same works within the commerce segment in India running hot. The company’s name was termed after the small unit.

Zepto Business Model: Dark Store model

The dark store might appear ominous. They undercut clever strategies that kept some retail establishments afloat during COVID-19. It’s the distribution centers that are not accessible to the public. The small warehouses precisely fill orders and give consumers access to resources and choices, including same-day delivery, in-store pickup, and online shopping.

The immediate success of Zepto is its ability to produce more than 2500 items in 10 minutes regularly. It is at the center of everything the grocery business does; it’s how they have increased so swiftly while retaining such strong client loyalty. 

Zepto has decreased the time it takes to deliver goods to ten minutes by utilizing the dark store concept. The grocery delivery sector is experiencing great profit, and startups like Zepto are the fastest growing sector in the delivery sector.

Advantages of Zepto Business Model

The idea of Zepto sparked confines of the founders’ homes during the pandemic spread. Due to the increasing demand for food and grocery delivery services, there is a vacuum for speedy delivery. This knowledge gave birth to the Zepto business model, which proved very beneficial during the unexpected pandemic spread.

Faster Delivery and Improved Distribution
Zepto fulfills multiple orders swiftly, all thanks to the dark store. Cold and micro warehouses offer different distribution options, physically delivering groceries closer to a market group. The grocery delivery platform can regulate the distribution.

Boost Customer Reach
The cloud kitchen makes distribution hubs accessible to consumers; they accept round-the-clock services online. Consumers are drawn to these grocery delivery platforms and employ the services as a result.

Contactless Shopping
The contact-free shopping has influenced businesses to opt for a “dark store” approach. Cloud kitchens or dark stores enable consumers to shop for meals and groceries without interacting with others or moving to physical stores. They list things online and get them delivered right away.

Improved Product Assortment and Inventory

Dark stores provide excellent inventory control, handle great order quantities, and have no consumers. Zepto’s AI-powered platform enables inventory stock tracking and product assortment.

How Zepto Works: Check Everything Here!

Zepto has 100 places that are known as micro fulfillment centers or dark stores that lie in higher-demand neighborhoods. Such types of stores use modern technology to perform tasks like the placement of products, the company finalizes the store’s location, and mapping delivery routes to avoid heavy traffic congestion.

The company delivers almost 2500 items, including fresh produce, cooking necessities, personal care items, home cleaning items, and snacks and beverages. The company founders bring an execution like Doordash to their q-commerce Zepto business model. 

The startup is looking forward to satisfying the growing needs of more than 1,00,000 new customers. Customers need to follow simple steps to get their daily essentials delivered to their doorsteps.

  • Customers can download an app or visit the website to check the product list;
  • After completing the registration and login process, they are allowed to place an order;
  • Dark stores nearby receive the notification related to customers’ orders;
  • Store pack the items and hand them over to the delivery partner;
  • Delivery partners collect the order and deliver it to customers’ doorstep;
  • Customers can make payments and give feedback.

You can consider following the Zepto business model and workflow while launching a similar business. Investing in a ready-to-use anything delivery app can prove to be a profit-making option.

Future Plan of Zepto

The Mumbai-based company, Zepto is looking to expand its client base, open dark stores, and hire more staff to ensure smoother operations. The company is operational in Delhi, Bengaluru, Hyderabad, Pune, Chennai, and Kolkata. Zepto is looking to offer its service in more countries in the future.

The company is planning to cover about 100 pin codes. India’s quick commerce market is expected to reach around $5 billion by 2025. It’s projected to reach $300 million. Zepto founder Palicha stated, no one has fully grasped marketing in India. 

When you look at older organizations that are trying to follow an effective approach, you will find that many lack the consistency to run on a single model and are unfocused. They engage in many activities, which is the largest problem in each major company.

Adding further, the founder also concluded, “we have noticed median delivery times stabilize if not lower because we scale our expansion and coverage; it ends up being an aspect of single cloud stores and how they perform.” 

Express delivery is a fresh idea; most e-grocers have tried the same in the past, with varying degrees of success. The delivery platform brings quick delivery to customers through the dark-store concept.

Get Your Zepto Like App Deployed Today!

Quick delivery services have disrupted the grocery delivery space. Delivery giants like Swiggy, BigBasket, and Instamart are planning to complete deliveries in less than 15 minutes by the end of this year. By the end of FY22, Fraazo is also planning to triple the number of its dark stores to 750. BigBasket and Dunzo are vying to enter the quick commerce market.

Zepto entered the supermarket delivery area at the right time and grabbed great success. If you’re looking to set up an on-demand grocery delivery business, you can get in touch with White Label Fox. With the power delivery and growth suite, we enable you to deliver faster to the customers.

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