Zepto to diversify from groceries into higher value items, looks to set up bigger outlets - Hindustan Times

Zepto to diversify from groceries into higher value items, looks to set up bigger outlets

By | Edited by Abhyjith K. Ashokan
Jun 17, 2024 03:22 PM IST

Zepto aims to diversify its delivery offerings as it gears up to raise fresh funds from investors ahead of a public-market listing potentially in 2026.

Zepto is looking to set up bigger dark stores for stocking a larger assortment of products, as the online grocery platform seeks to move into non-grocery delivery, according to two people aware of the company's plans, Mint reported.

A Zepto delivery partner at Bandra-Kurla Complex (BKC), in Mumbai (Satish Bate/HT Photo)
A Zepto delivery partner at Bandra-Kurla Complex (BKC), in Mumbai (Satish Bate/HT Photo)

A dark store is an outlet or distribution centre exclusively for online shopping.

This comes as investors queue up to buy a stake in the four-year-old startup, the article read.

Over the coming months, Zepto will look to set up one or two big storage facilities in major cities for items such as electronics, appliances, gifting items, and even luxury goods like gaming consoles, the two people told Mint on condition of anonymity.

Also Read | Indians get hooked on 10-minute grocery apps, squeezing small retailers

“Zepto is slowly adopting Swiggy Mall’s and Blinkit’s model of maintaining specific stores for non-grocery items and a greater number of small stores for fast-moving goods," this person said. “While Zepto is making strides in ramping up e-commerce sales, its focus will remain on quick commerce."

According to the second person cited earlier, Zepto had even considered creating a separate tab in the smartphone application for e-commerce orders, much like Swiggy’s Mall feature, but decided against it keeping in mind its commitment to 10-minute grocery orders.

Zepto currently operates roughly 250 dark stores across major cities like Mumbai, Bengaluru, Hyderabad, and Delhi-NCR, among others.

Quick commerce firms are increasingly looking to sell non-grocery items as the large ticket sizes help boost order values and volume, with the financials of leading players showing the speed of growth of the quick commerce business.

Also Read | Zomato appeals amid heatwave: Don't order in ‘peak afternoon’; food delivery executives react

Market leader Blinkit’s financial year 2023-24 operating revenue stood at 2,301 crore. Previous year’s revenue was 724 crore.

Zepto’s 2022-23 revenue grew 14 times to 2,024 crore, up from 142 crore a year back, according to data sourced from the portal of the ministry of corporate affairs. However, losses widened 226% to 1,272 crore during the year, according to the Mint report.

According to a report by HSBC Global Research from April, Zepto has steadily increased its quick-commerce market share to 28% at the cost of Swiggy Instamart over the past two years, while market leader Blinkit has grown its share to 40%.

Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto shot to fame after it secured upwards of $150 million in funding from marquee investors such as Y Combinator and Nexus Venture Partners within months of inception.

Also Read | Delivery agents strongly react to Zomato’s plea against afternoon orders: ‘Humara target poora kaise hoga?’

It attained unicorn status last year after bagging $200 million in Series E funding led by US private equity investor StepStone Group, joined by Goodwater Capital and existing investors such as Nexus Venture Partners and Glade Brook Capital, according to the article.

Zepto is now gearing up to raise fresh funds ahead of a public-market listing potentially in 2026. The firm is said to have received commitments upwards of $1 billion ( 8,354.87 crore) for its pre-IPO round, a third person aware of the matter told Mint.

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