Published Online:December 2024
Product Name:The IUP Journal of Case Folio
Product Type:Article
Product Code:IJCF011224
Author Name:Smita Ray and Manish Agarwal
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:6-22
The case is about the growth of quick online grocery delivery company Zepto and how its business model disrupted the Indian online grocery delivery market. It starts with the $200 mn funding raised by Zepto, which led to the company moving toward the unicorn club. Before describing Zepto, the case details the scenario of the online grocery market both in the global and the Indian context and then discusses both the global and Indian online quick grocery market. Zepto’s business model focused on delivering groceries in 10 minutes, which helped the company differentiate itself from its competitors. However, other online grocery delivery companies were quick to follow in Zepto’s footsteps and enter the Indian online quick grocery delivery segment. The case ends with the challenges Zepto could face and the future plans of the company. It remains to be seen whether the 10-minute delivery model will be sustainable in the future.
In May 2022, India-based quick online grocery delivery company Zepto raised a funding of $200 mn. After this round of funding, the valuation of the company went up to $900 mn and it moved toward the unicorn club.ii In April 2021, Zepto had revolutionized the Indian online grocery space by introducing a 10-minute delivery model.iii In the first year of its journey, Zepto faced a high level of competition in the quick online grocery market of India. But by following the hub-and-spoke model1 using micro warehouses, the company was able to fulfill its objective of delivering groceries quickly. As a result, it reported a revenue growth of 800% quarter-on-quarter by cutting down its expenses per order by more than five times. On Zepto’s performance, Aadit Palicha (Palicha), Co-Founder of the company, said, “We posted 800% quarteron- quarter revenue growth, while burn has come down 5X on a per-order basis.