THE STORY OF ZEPTO - Groceries delivery timing mein ab zepto jhukega nhi!

Authored by Laharika Bezawada | Club Executive Member

As we are moving in a fast forward world, the delivery game has improved with many innovative and time saving ideas one of them was a challenging 10 minute delivery concept. This concept was the main key feature of Zepto, an online delivery app which was founded by two friends ,when we get to know that this is a start-up founded by two 19-year-old aspirations, it appears miraculous and impossible to believe. Aditya Palicha and Kaivalya Vohra, both Stanford dropouts with a computer science degree, are the minds of Zepto, and they built their strategy after thoroughly examining consumers and their expectations. And they are ready to become the market leader, competing against market giants such as Big Basket, Grofers, Swiggy, Danzo, and Amazon Pantry.

During the COVID-19 outbreak, the concept for Zepto arose in the restrictions of their homes. A surge in demand for delivery services indicated that groceries and other necessities would arrive in a matter of days, creating a vacuum for quick delivery. As a result, Zepto was created with that thought in mind. Now all the big boys in grocery delivery business face one common challenge – Customers with switching loyalties. Consumers evaluate 3 basic deliverables: quality, service, and price (QSP). The creators of Zepto recognised that, while price and quality are vital, there is a leftover desire for groceries to be delivered but with much less time lag. So, if they can pull this off, they might be able to dominate the big boys with deep resources.

As it turns out, the lot of consumers have all of the grocery delivery apps installed and compare costs on the apps before ordering goods. Although, customers are receiving a great deal, it is a significant expense for delivery apps. Furthermore, there is no assurance that the buyers would not shift to another app for their next order. This leaves little room for commitment and burns a hole in delivery apps' pockets with each purchase.

Aditya and Kaivalya launched "Kirana Kart" in September 2020 to deliver groceries to buyers' homes. While driving the "Kirana Kart", they learned a vital lesson. They discovered that consumers who had their groceries delivered within 45 to 60 minutes had a 20% chance of ordering again, whereas customers who had their groceries delivered within 20 minutes had a 40% chance of ordering again.

It has indeed provided precision to the founders as to where they'll concentrate their efforts. When these trends became persistent for more than a month, they shut down "Kirana Kart" on March 2021 and was relaunched as "Zepto" with unique user insights in April 2021.

To assess the corporate sustainability, they conducted an extensive catchment study based on user insights, average expenditure, and size of the population. In this phase, they analyzed the routes and traffic congestion, among other things in order to determine the viability of the 10-minute commitment.

Finally, the founders have proposed the establishment of "Dark Stores" within a 3 kilometers radius. With the help of these centrally positioned dark stores, which operate as tiny warehouses, it is capable of meeting demands in this area. Surprisingly, the time taken by Zepto's delivery boy to deliver groceries from these dark stores to the consumer's doorstep is nearly identical to that of other online grocery apps, yet Zepto still has an advantage. How?

So, if we break down the complete process from customer order to delivery, the three important components are: Ordering, Packing, and Bagging. After bagging, all delivery apps compete on a level playing field. That's where Zepto differentiates itself by depending significantly on technology and being hyper-focused on "Speed." The game in which Zepto engages is "Speed," not "Price".

As of November 2021, these aspiring entrepreneurs have secured $60 million in an investment round headed by Glade Brook Capital, valued at $225 million post-money. Y Combinator and Neeraj Arora, former Chief Business Officer of WhatsApp, were also participants in this round.