The swift rise of Zepto has redefined the quick commerce space in India. What started as an ambitious experiment during the pandemic has grown into a $5 billion company, reshaping how millions of Indians get their groceries delivered within minutes. In a recent discussion, Zepto's co-founder, Aadit Palicha, shared insights into the journey, its challenges, and how they’ve managed to build a sustainable business model while disrupting an industry.
Zepto’s Journey: From Pandemic Necessity to Unicorn Status
The idea for Zepto was born out of necessity during the height of the COVID-19 pandemic. With grocery deliveries delayed by several days and many stores closed, Aadit and co-founder Kaivalya Vohra spotted an opportunity. Starting as a simple WhatsApp group delivering essentials to local customers in Mumbai, the concept quickly evolved. The founders dedicated a year to fine-tuning the model, speaking with customers, and iterating on their service. What followed was a groundbreaking decision: to leave Stanford and build a scalable solution that would deliver groceries within 10 minutes.
Key Milestones:
- 2021: Zepto was officially launched and rapidly scaled its operations.
- By Age 22: Aadit and Kaivalya became India's youngest unicorn founders with Zepto's valuation surpassing $5 billion.
- Pandemic Spark: The quick commerce model gained traction as it bridged a crucial gap when other services faltered during the pandemic.
The Power of 10-Minute Deliveries
One of Zepto’s defining innovations is its promise to deliver groceries in 10 minutes, a feat that sets it apart from competitors. Aadit shared that the 10-minute delivery model wasn’t just a random goal—it was based on feedback from customers who wanted the convenience of getting groceries as quickly as if they had gone to a nearby store.
Through meticulous planning, Zepto launched its first "dark store" in Bandra, Mumbai, which allowed them to hit this ambitious target. The real magic lies in their operational efficiency and data-driven approach. Over time, the average delivery time has fluctuated slightly based on external factors like weather, but the median remains around 10.6 minutes.
Why 10 Minutes?
- Customers demand hyperlocal convenience.
- Quick deliveries lead to increased retention and loyalty.
- The efficiency of their dark stores ensures scalability.
The Gig Workers Powering Zepto’s Success
Behind Zepto’s lightning-fast deliveries is a workforce of 50,000 gig workers. Aadit emphasized that these delivery partners are not just a means to an end—they are crucial stakeholders in Zepto's success. The company has built numerous programs to improve the lives of its workers, offering benefits like health insurance, daily payouts, and vehicle maintenance assistance.
Zepto also stands out for its approach to ensuring worker satisfaction and retention. From giving gig workers flexibility to work part-time to experimenting with daily wage payouts, Zepto continually innovates to enhance the lives of its delivery partners. This, in turn, helps the company reduce turnover and maintain operational stability.
The Role of AI and Tech in Quick Commerce
As Zepto scales, technology remains at the core of its growth strategy. With a product and engineering team in Bangalore, the company is investing heavily in artificial intelligence (AI) and data science to enhance efficiency. AI helps optimize everything from delivery routes to warehouse inventory management, ensuring that Zepto can keep its 10-minute promise.
Future-Proofing for the Tech Landscape:
- AI-Powered Solutions: Zepto’s ad platform allows brands like Unilever and P&G to bid on keywords, contributing significantly to their revenue.
- 6G Readiness: As India prepares for the 6G rollout, Aadit believes it will further transform how consumers interact with the platform, potentially creating even faster and more seamless user experiences.
- AI and Personalization: Zepto is leveraging data science and machine learning to optimize user experiences, particularly through search and product recommendations. The company personalizes results based on user location, device type, and even product preferences.
- Advertising and Supply Chain: Zepto has developed its own advertising engine called Javas, and it uses machine learning to optimize its supply chain. This includes predicting demand on a store-by-store and micromarket level, which helps with pricing and stock management.
- Generative AI in Customer Support: Zepto is working on implementing generative AI to speed up customer support. Instead of waiting for human agents, users would get responses from AI chatbots in just seconds, aiming to deliver more efficient and potentially more accurate assistance.
- Workplace Dynamics: Despite his young age, Adit leads a team of experienced professionals, including top executives from companies like Myntra and Flipkart. He highlights a culture of "execution excellence" and mutual respect based on substance and results.
- Expansion Strategy: Zepto's rapid growth is backed by data-driven decision-making. They prioritize cities and micromarkets based on e-commerce data, population density, and consumption indicators like the number of restaurants and high-rise complexes in an area.
- Vision for India’s Startup Ecosystem: Adit and his co-founder are driven by the larger goal of building a world-class internet company from India, something that has yet to be achieved at the scale of companies like Uber, Airbnb, or Pinduoduo. They aim for Zepto to set a precedent, which could uplift the entire Indian startup ecosystem.
- The Motivation Behind Zepto: For Adit, it's not about the wealth or market valuation. He is passionate about building something impactful and world-class, hoping to set an example for other Indian startups to follow.
Looking Ahead: A Vision for the Future
Zepto’s journey is far from over. As Aadit reflects on their achievements, he remains focused on continuous improvement—both in their delivery promise and the value they add to customers and employees. With a clear vision and an eye on technological advancements like AI and 6G, Zepto aims to stay ahead of the curve in the competitive quick commerce space.
Conclusion: Zepto’s success story serves as an inspiration to entrepreneurs everywhere. In just a few short years, they’ve not only changed how India buys groceries but have also set new standards for speed, convenience, and operational efficiency. As Aadit succinctly puts it, “The future can be delivered today.”