Among the grocery delivery startups, Zepto is one of the newer entrants to the rapidly growing Indian market. Its CEO and co-founder, Aadit Palicha, confidently equates Zepto and its future to the Amazon of the late 1990s and early 2000s. Zepto employs a dark store model that increases efficiency in the delivery process while at the same time reducing operational overheads.
Zepto’s Business Model
Zepto delivers products through warehouse-style outlets in residential places. Unlike traditional retail stores, these stores are closed to customer traffic but play a central role in fulfilling web-based orders. They can offer different goods for sale. Customers can only order using the Zepto India app or online platform. The whole process of purchasing happens virtually. They make their outlets easily accessible to their target customers and ensure delivery is done within 10 minutes.
These dark stores are located close to one another, which means the delivery can be completed incredibly fast. Employees do not have to help customers in physical stores, Zepto has a limited number of employees. Zepto uses artificial intelligence for order sorting and also packaging for dispatching. It allows a smooth transition from the selection stage to the delivery stages in a manner that does not compromise on quality or services.
Zepto’s Growth
Apart from Swiggy Instamart and Blinkit, Zepto has completely changed how consumers in India get their hands on daily use household items. Palicha compares Zepto today with Amazon in the past and notes that the company’s valuation can reach between $50 billion and $80 billion. However, he states that strategy implementation is the key success factor.
Success behind Fundraising
Fundraising has been remarkable for Zepto. In August 2023, the startup raised $231 million, thereby becoming a unicorn with $1.4 billion. It then completed another funding round, by which it raised $665 million and brought its valuation to $3.6 billion. There are talks for another $250 million round of funding and if it goes through, Zepto could be valued at about $4.6 billion.
Handling of the Inventory Management
At Zepto, inventory is managed closely so that stocks are not over-purchased and not under-purchased. This is how their AI-powered tools aid in keeping the right balance. Zepto’s website offers over 3,000 products, and their arrangement is purposeful. These stock ranges are in line with customer needs, so packing and dispatching can be done quickly.
The micro-fulfillment centers and dark stores that Zepto does not have physical outlets allow for efficient delivery. This reduces time wastage and improves the client experience. Zepto’s state-of-the-art supply chain management helps in smooth functioning, speedy delivery, and better variety across stores.
Zepto and D-Mart
Palicha believes in giving it to you straight and his predictions are not constrained to the valuation. With such audacity, he claimed that Zepto would overtake D-Mart, which currently boasted a $30 billion market capitalization. Zepto’s sales are already 4.5 times that of D-Mart and at this rate can pose a serious challenge to the established supermarket.
Conclusion
Zepto’s grand vision, excellent strategy, and quick fundraising make it one of the most promising startups. While it has upended the business model of quick commerce, the analogy of following in the footsteps of Amazon’s early days brings anticipation. Whether Zepto can hit all of these targets is yet to be seen, but there is no denying that its influence on the industry is significant.m
