What is Zepto? Is it a Rapid Delivery App Killer?

What is Zepto?

Zepto is an online instant grocery delivery service that guarantees to deliver products within 10 minutes. Yes, we know, it’s something that every grocery delivery service wants you to believe, but this is actually happening in the case of Zepto. Although, in certain locations, the delivery time can be as much as 25 minutes, which is still faster than what its competitors offer.

Consequently, businesses – not just in India but elsewhere – are interested to know how the service offered by Zepto is possible and what kind of business model it has. We’ll discuss the same later in the article.

Zepto was conceived by two young and ambitious Stanford students – Kaivalya Vohra and Aadit Palicha – in 2021 to meet the increasing demand for fast contactless delivery of grocery items during the COVID pandemic.

The quick commerce business has its own digital wallet, aptly called Zepto Cash, which makes it easy and quick to make payments for orders placed on the platform.

Furthermore, Zepto features a referral scheme where both the referrer and the referral get a 25% discount. It also offers a galore of coupons and deals to entice new and returning customers.

Why is it Getting So Popular?

Compared to established brands like Dunzo and Blinkit, Zepto is getting increasingly popular. There are several factors that contribute to this fact. Some of the most important factors that contribute to the popularity enjoyed by Zepto are:

• Giving a run for money to competitors in terms of products offering and customer service
• Ability to deliver products faster and ensure quality
• Backing from Y Combinator
• Gaining an advantage by being the new kid in the town
• Being an idea incepted by two young entrepreneurs
• Excellent customer support
• Maturity of the global quick commerce market

Zepto is enjoying a great deal of popularity not only in its home market but also around the world as businesses are trying to capitalise on the popularity of its business model.

Although Zepto is – as of April 2023 – available in 10 cities across the country, it has ambitious plans to extend its offerings to more locations in India and elsewhere.

Zepto Business Model

The business model of Zepto is varied and efficient. It relies primarily on dark stores, which are similar to traditional supermarkets but aren’t available to the public.

Instead, these are acquired by businesses – like Zepto – to make product delivery faster and easier. In the early days, Zepto had dark stores in Bandra and Andheri East. Later, it expanded to include Delhi, Bangalore, Mumbai, Gurugram, and Chennai.

At present, Zepto operates 40 dark stores. The business developed an efficient AI-powered system to assist with choosing, packing, and delivering products. Moreover, it generates revenue from a number of sources, which are:

1.Commission Fee

Zepto earns revenue by charging commission fees to both customers and grocery stores. It takes a small delivery commission fee from the consumers and 15 to 20% of the value of the order as a commission fee to grocery stores.

2.Subscription and Membership Plans

Another important way to generate revenue is by offering subscription and membership plans to its clientele.

Monthly and yearly plans make it convenient for customers to leverage the qcommerce platform while increasing their savings on orders.

3.Advertisements for Grocery Stores

For advertising brands in the form of banners on its website and app, Zepto levy charges on grocery stores. They can purchase one or many advertisement spots on the Zepto platform in exchange for a fee.

With the popularity surge, the online grocery delivery business is attracting more investors and investments by brands to advertise on their platform, further increasing their earnings.

Zepto Business Model Canvas

Zepto vs The Rest

In this section, we will compare Zepto with its main competitors – Blinkit, Dunzo, and Instamart – on the basis of various factors that include delivery time, customer service satisfaction, and so on.

1.Delivery Time

This is the most important factor that determines the acceptance of an instant delivery service. Instamart takes the most time by delivering products within a time frame of 30 to 45 minutes. Dunzo requires about 19 to 30 minutes to make deliveries.

Both Blinkit and Zepto promise to deliver products within 10 minutes, which they do, but not always as there are several factors included, such as the distance between the store and the location of the user and rainy weather.

Winner – Zepto and Blinkit

2.Customer Service Satisfaction

Customer service is an important make-or-break factor for any business, may it be online grocery delivery or something else. The better customer service a business offers, the more love it receives from its customers.

In addition to customer support, the delivery partner’s conduct also plays an important factor in the popularity of an online grocery delivery service.

Thankfully, Zepto has the best customer service among its group whereas Blinkit lags in customer service and Instamart gets the lowest spot for its worst delivery partner’s conduct.

Winner – Zepto

3.Variety of Products and Offerings

Another important factor that determines the acceptance of any online marketplace is the availability of products. Instamart has a huge diversity of more than 7k products.

With 5k+ products, Blinkit, Dunzo and Zepto are also diverse online grocery marketplaces for shoppers.

Winner – Instamart

4.Deals and Offers

Dunzo is on the top when it comes to providing the best discounts and deals. Zepto comes next with a good range of deals and offers on various products.

Zomato-backed Instamart also provides a multitude of offers but it is less than that offered by Zepto. In terms of the availability of great deals and offers, Blinkit gains the last spot on the list.

Winner – Dunzo

5.Availability

Both Blinkit and Instamart cover much more area than Dunzo and Zepto because of being backed by the Indian online food delivery giants, Zomato and Swiggy.

Dunzo is available only in 7 cities while Zepto offers delivery in multiple locations across 10 cities. Blinkit facilitates grocery delivery in 23 cities across the country. Instamart leads the pack with a total serviceable city count of 29.

Winner – Instamart

Conclusion

Zepto has become a breakout brand in the quick commerce segment. In mere 2 years – as of 2023 – of its existence, the quick commerce business has emerged as a disruptive business idea that is ready to lead the market.

At present, businesses and experts around the world are busy dissecting the Zepto business model for two major reasons. The first is to understand what makes it tick and the second is to gain the details of developing a highly profitable quick online grocery delivery platform.

Apptunix is an experienced development company providing online grocery delivery solutions to clients across the globe. Our team of professionals are adept and flexible in working with varying user requirements and technologies.