As part of its strategic maneuvers to bolster profitability, Zepto, India’s quick commerce startup, has implemented a platform fee of Rs 2 per order. Moreover, the company has discontinued complimentary deliveries for certain users and now imposes delivery charges ranging from Rs 5 to Rs 28, contingent on the order value.
These fees, along with various other charges such as handling fees varying between Rs 5 and Rs 20, a surge fee, and a “cart fee” applicable to orders below Rs 100, underscore Zepto’s initiative to broaden its revenue channels beyond mere delivery fees, aiming for enhanced operational efficiency and cost mitigation.
Comparison with Competitors
Unlike its counterparts Blinkit (owned by Zomato) and Swiggy Instamart, which solely levy handling fees, Zepto has delved into the realm of platform fees, a domain more commonly associated with these companies’ food delivery sectors. This move is perceived as an effort to mirror the revenue models of its competitors while targeting EBITDA profitability by 2024.
Zepto Pass: A Membership Initiative
Concurrently with the platform fee, Zepto recently introduced a membership scheme called Zepto Pass, available at prices ranging from Rs 99 to Rs 299 per month, providing unlimited complimentary deliveries for orders exceeding Rs 99. The startup has offered this program at a discounted rate of Rs 19 and has swiftly garnered 1 million subscribers.
Focused on Profitability
Despite experiencing a notable 14-fold surge in revenue, reaching Rs 2,024 crore in FY23, up from Rs 142.36 crore in FY22, Zepto also encountered a substantial escalation in losses, soaring more than three-fold from Rs 390 crore in FY22 to Rs 1,272 crore in FY23. Nonetheless, despite this surge in losses, the company aims to attain EBITDA profitability and curtail monthly cash outflows. Notably, it is contemplating relocating its headquarters back to India and listing on the Indian stock exchanges by 2026.
