Zepto, a quick-commerce startup from India, has achieved a remarkable milestone of surpassing $1 billion in annualized sales within 29 months of its inception. According to a note by Goldman Sachs, citing Zepto management, the startup is not only growing rapidly but also gaining market share in the instant-commerce segment.
Market Share and Growth
Zepto’s success can be attributed to its innovative business model, which focuses on delivering items within 10 minutes of placing an order. The startup operates in seven Indian cities and uses a network of over 300 dark stores, or microfulfillment centers, to offer customers delivery of items from various categories, including grocery and electronics. As per the report, Zepto processes approximately 550,000 orders daily, indicating its significant growth.
Competitive Landscape
Zepto is competing with other prominent players in the instant-commerce market, such as Blinkit (owned by Zomato) and Swiggy Instamart (backed by SoftBank). However, Zepto’s growth rate and market share are noteworthy. According to Goldman Sachs, Zepto has gained market share close to that of the number 2 player.
Backers and Funding
Zepto became a unicorn last year, receiving funding from notable investors like YC Continuity, StepStone Group, Glade Brook Capital, and Contrary. The startup’s success has attracted significant attention in the investment community.
Business Model and Finances
Zepto’s business model is centered around its dark stores, which enable quick delivery of items to customers. The startup promises to deliver items within 10 minutes of placing an order, making it a convenient option for consumers. As per the report, Zepto’s overall EBITDA margin is in negative single-digit percentage, but the company is on track to break even at the EBITDA level within the next quarter.
Challenges and Opportunities
The instant-commerce sector is rapidly growing in India, with players like Zepto and Blinkit making significant strides. However, traditional supermarkets and neighborhood stores are also adapting to this new business model, posing a challenge to e-commerce giants like Flipkart and Amazon. India’s quick-commerce sector has surged past the $5 billion mark, capturing over half of the online grocery market.
Industry Outlook
The report by Goldman Sachs highlights the potential of quick-commerce platforms in India, citing their proximity advantage to customers while maintaining price, assortment, and quality benefits. Zepto believes that its business model is well-positioned versus other formats of organized grocery in both offline and online domains.
Conclusion
Zepto’s success is a testament to the growth of the instant-commerce sector in India. With over 300 dark stores and a significant market share, the startup is poised for further expansion. As the industry continues to grow, it will be exciting to see how Zepto and other players adapt to changing consumer demands and competition.
About Zepto
Zepto is an Indian quick-commerce startup that operates in seven cities across India. Founded by two college dropout teens, the startup has grown rapidly since its inception. With a network of over 300 dark stores, Zepto offers delivery of items from various categories, including grocery and electronics, within 10 minutes of placing an order.
Related News
- Quick commerce is making fast inroads in India: The instant-commerce sector in India has seen significant growth in the past three years.
- Blinkit acquires Instamart to become largest quick commerce player: Zomato-owned Blinkit acquired Instamart, a quick-commerce startup backed by SoftBank.
Related Terms
- Quick-commerce: A business model that focuses on delivering items quickly, often within minutes of placing an order.
- Dark stores: Microfulfillment centers used by quick-commerce startups to store and deliver items to customers.
