“Grocery Delivery Sector” is one of the many sectors that are expanding and succeeding at an exponential rate. Just like window shopping, you can select and buy groceries that will be delivered to you. However, most of the delivery services take almost thirty minutes to deliver the product but there is a company that delivers the groceries within 10 minutes after placing the order. That company is none other than “Zepto.”
Have you ever wondered how Zepto delivers the order so quickly and how it gained its reputation within three years of establishment? The reason behind this success is their impactful and smart business technique. This article provides an explanation of the “Zepto Business Model.”
The business model of Zepto consists of three essential components-
- Working Strategy
- Marketing Strategy
- Revenue Sources
The main objective of Zepto is to provide the best and quickest service to its customers. The efficient working strategy of Zepto is based on four pillars, namely-
1: Q- Commerce
It stands for quick commerce. It is an instant service model of e-commerce where the marketing and dealings (buying & selling) of products & services occur on the internet. Zepto efficiently utilizes the internet to execute its business. The customers place their orders on the Zepto app and their products are delivered quickly with the help of dark store models or micro markets. It delivers various types of items like fresh produce, snacks, beverages, dry rations, cleaning items, personal care items, etc.
2: Dark Store Model
This is the core working strategy of Zepto. The dark stores are Micro Warehouses (the physical outlets) specially installed for the distribution of the products. These are not open to visitors i.e., you cannot buy the products directly (offline) from the distribution outlets of Zepto. The dark store uses advanced AI-powered technology to perform various tasks ranging from placement of orders, packaging the products, mapping the traffic-free routes for quick delivery routes, and buying fresh grocery items from the bulk distributors. You need to place the order on the Zepto app. Thereafter, their team fulfills the orders and delivers the product to your doorstep.
3: Key Partners
There are three key partners of Zepto- Local Stores, Financial Partners, and Delivery Partners. Zepto buys the groceries in bulk from the local stores and transfers them into the dark stores (micro warehouses). The financial partners aid in the digital payment systems for Zepto. The delivery partners help in the delivery of products from dark stores to customers.
4: Usage of AI–Powered Technology
AI-powered technology is the key reason for the smooth working of Zepto. It utilizes location intelligence and geospatial data to determine the target population/audience, geographical location of the customers, patterns of roads, traffic dynamics (to select the roads having less traffic/crowd), supply availability (availability of the products that the customer ordered), weather conditions (for instance, heavy rainfall may disrupt the product delivery), values of the real estate (for establishing a dark store), etc.
In short, the customers register and log in to the Zepto app and place an order. The dark store present in the nearest location of the customer receives the notification about the order of the customer. The team present in the dark store packs the item and hands it over to the delivery partner. The delivery man delivers the order to the location of the customer by using the quickest possible route. Finally, the customer receives the product and makes the payments.
The marketing strategy of Zepto mainly involves online Ad campaigns. The ad campaigns of Zepto are one of the best among its competitors. Their advertisements are quirky enough with the tagline of “10-minute delivery” and “zero delivery charges” to hit the target audience and encourage them to use Zepto app. The quick delivery of products within 10 minutes is the USP (Unique Selling Proposition) that helps it stand out among its competitors. Other than ad campaigns, Zepto uses the following marketing strategies-
- Social Media Marketing
- Influencer Marketing
- Television commercials
The major revenue of Zepto lies in its “Commission Based Model” and funding rounds.
- Commissions– It receives a commission of 2-4% on each order placed through its app. These commissions help to cover the costs of the expenditures.
- Funding Rounds- It raised a significant amount of money through multiple funding rounds. As of today, the value of Zepto is around USD 900 million.
The impactful working and marketing strategy of Zepto has played a key role in the success of this quickest-growing startup. It works on a brilliant business model that contributes to the accomplishment of the tasks within the stipulated time. As a result, it gained broader customer reach and effectively boosts contactless shopping for customers.