Zypp Electric Business Model: How Does It Make Money?

“Petrol ko maaro goli, Zypp electric se bharo savings ki jholi…” is the tagline that made this EV-as-a-service platform famous!

To the uninitiated, let me tell you that Zypp Electric offers vehicle renting and delivery services through its e-scooters. So yeah, you can say that Zypp Electric works on the recurring business model.

But that’s just the tip of the iceberg. In this article, we will discuss Zypp Electric business model and its various revenue streams.

Stay tuned!

(A) Zypp Electric: Profile Overview

Zypp Electric is a company in India that provides electric vehicles (EVs) for last-mile delivery services. Founded in 2017, its mission is to reduce pollution and make India carbon-free by using EVs and advanced technology for deliveries.

The company aims to provide carbon-free deliveries for local businesses and big e-commerce companies. This helps reduce delivery costs and pollution.

Zypp Electric delivers items like groceries, medicines, food, and e-commerce packages using smart, automated electric scooters. These scooters are equipped with Internet of Things (IoT) and Artificial Intelligence (AI) technology, making them efficient and easy to maintain. Zypp Electric’s approach not only supports sustainability but also enhances the efficiency of delivery services.

Before diving into the details, let’s dive into the profile of this company-

Note: When it comes to electric scooters, two other famous brands are Ola Electric and Ather. To know which one is better, go through the article “Ola vs Ather: Which company is leading the EV race?” for detailed information.

(B) Working Strategy: How does Zypp Electric work?

As you know, Zypp Electric is on a mission to make India carbon-free by using  EVs and advanced technology.  They focus on creating sustainable, emission-free last-mile logistics in the following ways-

Eco-Friendly Fleet

• IoT- and AI-Enabled Scooters: Zypp Electric uses a fleet of scooters equipped with Internet of Things (IoT) and Artificial Intelligence (AI) technology. These scooters are designed to be low maintenance and high performance.
• Real-Time Tracking: The scooters have real-time tracking capabilities, allowing efficient management and monitoring of the fleet. This helps ensure timely deliveries and better fleet utilization.

Battery Swapping Stations

• Quick Battery Replacement: To overcome the challenge of long battery charging times, Zypp Electric operates battery swapping stations. These stations allow riders to quickly replace a depleted battery with a fully charged one.
• Continuous Operation: This battery swapping system ensures that scooters can continue operating without downtime, as there is no need to wait for batteries to recharge. This increases the efficiency and reliability of their delivery services.

Last-Mile Delivery Services

• Partnerships with leading Companies: Zypp Electric collaborates with major logistics companies and delivery platforms, including Blue Dart, Ecom Express, Zomato, Zepto, and Swiggy. 
• Asset-Light Model: Their model involves deploying a large fleet of over 16,000 EVs, referred to as “Pilots,” in key areas like Delhi NCR and Bangalore.
• High Delivery Volume: These Pilots manage over 3.5 million deliveries every month. By using EVs, they provide efficient and eco-friendly last-mile delivery services, significantly reducing emissions in urban areas.

Reducing Emissions

• Replacing ICE Vehicles: By replacing traditional internal combustion engine (ICE) vehicles with EVs, Zypp Electric helps reduce air pollution and greenhouse gas emissions.
• Urban Impact: Their focus on last-mile logistics means that the reduction in emissions has a significant impact within cities and urban areas, where pollution levels are typically highest.

Hence, through their innovative approach, Zypp Electric contributes to a cleaner and greener environment, particularly in densely populated urban areas.

(B) Revenue Sources: How does Zypp Electric make money?

Before looking into the revenue sources of Zypp Electric, let’s quickly go through its financials for the FY20, FY21, and FY22-

Zypp Electric generates revenue through several key sources, each contributing to its overall financial success. Now. let’s see how Zypp Electric generates revenue-

• Revenue from Contracts: These partnerships are formalized through contracts where Zypp provides its electric scooters to these companies. Zypp earns money by charging these companies either through leasing fees or usage-based fees.
• Asset-Light Leasing: Zypp Electric operates on an EV-as-a-service model, where they provide electric scooters to businesses on a lease basis. This means companies can use Zypp’s scooters for their delivery needs without owning them. In other words, Companies lease Zypp’s electric scooters for a fixed period, paying a regular fee. This model provides consistent revenue as long as the lease agreements are active.
• Usage Fees: Revenue from usage fees depends on how much the scooters are used. This could be based on distance traveled, hours of usage, or the number of deliveries completed. The more the scooters are used, the higher the revenue Zypp earns.
• Maintenance & Service Fees: Zypp offers maintenance services to keep the scooters in top condition. Companies pay for these services, either through one-time fees or maintenance contracts. This ensures the scooters remain reliable and efficient, reducing downtime and repair costs.
• Battery Swapping Service: To keep the scooters running continuously without long charging times, Zypp operates battery swapping stations.
• Swap Fees: Users of Zypp’s scooters can go to these stations and swap their depleted batteries for fully charged ones. Zypp charges a fee for each swap.
• Subscription Models: Zypp also offer a subscription model where companies pay a regular fee for unlimited or a set number of battery swaps per month.

By leveraging these multiple streams, Zypp ensures a steady income while promoting sustainable, emission-free last-mile logistics.

(C) Marketing Strategies of Zypp Electric

Zypp Electric employs several key marketing strategies to promote its last-mile mobility services and drive business growth. Some of these strategies include-

• B2B and B2C Approach: Zypp offers both B2B and B2C plans, catering to businesses and individual consumers. This dual approach allows Zypp to target a wide range of customers, from businesses needing fleet solutions to individual commuters seeking convenient transportation options.
• Leveraging the Electric Advantage: Zypp’s marketing strategy capitalizes on the positive perception associated with electric mobility. By positioning itself as a sustainable and eco-friendly solution, Zypp benefits from the growing demand for environmentally conscious transportation options.
• Partnerships & Collaborations: Zypp collaborates with leading logistics companies and delivery platforms. These partnerships not only expand Zypp’s reach but also enhance its credibility and reliability as a provider of last-mile delivery services.
• Fleet Expansion & Infrastructure: Zypp focuses on expanding its EV fleet across key cities and building infrastructure like battery swapping stations. By emphasizing the availability and accessibility of its EVs, Zypp attracts both business clients and individual riders, driving the adoption and usage of its services.
• Driver Experience & Training: Zypp invests in training and managing its delivery executives effectively. Ensuring a positive driver experience contributes to customer satisfaction, word-of-mouth marketing, and client retention.
• Sustainability Messaging: Zypp communicates its commitment to sustainability through marketing campaigns. Highlighting the environmental benefits of using electric vehicles resonates with conscious consumers and businesses, strengthening Zypp’s brand image.
• Thought Leadership & Industry Participation: Zypp actively participates in industry events and forums related to electric mobility. By positioning itself as a thought leader, Zypp gains credibility and visibility within the EV ecosystem, attracting potential clients and partners.

How Do these Marketing Strategies help Zypp scale up its business?

• Customer Acquisition: Zypp’s B2B and B2C approach helps attract different segments of customers, driving revenue growth.
• Brand Image & Differentiation: Leveraging the electric advantage and emphasizing sustainability differentiate Zypp from competitors and enhance its brand image.
• Partnership Expansion: Collaborations with logistics firms and delivery giants not only extend Zypp’s market reach but also serve as endorsements of its services.
• Customer Retention & Loyalty: Prioritizing driver experience and sustainability messaging contribute to customer satisfaction and loyalty, reducing churn and increasing lifetime value.
• Industry Influence: Thought leadership and industry participation establish Zypp as an authority in the electric mobility space, attracting attention and trust from potential clients and partners.

That’s how these strategies collectively contribute to Zypp’s growth and success in the market.

(D) Final Words

Zypp Electric’s business model revolves around providing electric vehicles for last-mile delivery, making money through partnerships, leasing, and usage fees. By embracing sustainable solutions, Zypp contributes to a greener future while growing its business. Their success shows the potential for eco-friendly transportation to transform cities. 

By the way, what do you think about Zypp’s approach? Share your thoughts below!