Zepto hits life-time high of 750,000 orders on third anniversary

Zepto has recently raised $665 million in funding at a valuation of $3.6 billion

Zepto saw its highest order volume day on its third anniversary on July 15 with 750,000 orders, according to sources. This was an improvement of 25 percent over its daily average of 600,000 orders in the last one month.

Although the company ran a special marketing campaign on the day that included some giveaways for consumers, it didn’t cause any cash burn for the quick commerce startup as several brands on the platform bore the burden of the campaign.

Sources said that the gross merchandise value (GMV) of the sales on the day was between Rs 30 crore and Rs 40 crore, while gross margin improved by 100 basis points.

For comparison, Zomato’s quick commerce arm Blinkit saw a daily average order volume of more than 725,000 in the March quarter while the daily average GMV was Rs 44.7 crore.

As of the end of 2023, brokerage firm JM Financial had estimated that Blinkit was the leader in quick commerce with 46 percent of the market share, followed by Swiggy’s Instamart at 27 percent and Zepto at 21 percent.

“Zepto, in fact, is fast emerging as the dark horse; it appears to have gained meaningful share over the last 1 year despite having no background of running an operationally intensive B2C business, unlike its competitors,” analysts at JM financial said in a research note in February this year.

Meanwhile, people close to the developments said that Zepto currently has about 370 dark stores, of which 15 percent are new. They said that 85 percent of the old stores have reached store-level profitability in the last two months, while only 75 percent of stores were profitable about two months back. The company expects to double its dark store count from 350 now to over 700 by March 2025.

Zepto did not respond to Moneycontrol’s queries on the matter.

The Mumbai-based quick commerce unicorn has been on a fundraising spree in the last one year. Last year in August, it had raised $231 million at a valuation of $1.4 billion. Recently, it has raised $665 million at a valuation of $3.6 billion, as investors look to double down on the booming quick commerce sector in India.

Further, it has drawn investor interest for an additional $250 million in a fresh round that values the company at about $4.6 billion. The round, which could touch $400 million in size, could see private equity majors like General Catalyst and KKR joining the company's cap table.

“Total addressable urban retail market for quick commerce platforms (including both grocery and non-grocery) is c.US$300 billion. Top 50 cities make up 40%-45% of India’s c.500 million urban population, implying c.$150 billion in real TAM for quick commerce platforms (as of CY23), growing at 10%-12% annually,” Goldman Sachs said in a research note in April.

The implied value of Blinkit, the troubled quick commerce startup that Zomato acquired in a fire sale in 2022, is now larger than that of Zomato’s core business (food delivery), analysts at Goldman Sachs said at the time.

Zepto wants to focus on the top 50-75 million households in the country's top 40 cities as they make up the lion's share of grocery and daily essential purchases of the country. The Indian grocery market would be worth $850 billion by FY29, of which these top bracket households would account for $400 billion, according to the company.