Impact of Innovation and Operational Efficiency on

Competitive Rivalry in the Indian Quick Commerce

Industry

ZeptoCP03PR_Case Study of Zepto

 Company Overview
Zepto is revolutionizing India's Q-commerce scene with its bold 10-minute grocery delivery promise.
Born as KiranaKart and rebranded to capture its high-speed, tech-driven vision, Zepto is now valued at $1.4
billion.
While it leads in customer satisfaction, it faces stiff competition from Blinkit and Swiggy Instamart, along with the
challenge of soaring operational cost.
This report dives into Zepto's rise, its game-changing impact, and the strategies it needs for lasting success.
History of Zepto: The Rise of
India’s 10-Minute Delivery Unicorn
Founding (2021)

● Founders: Aadit Palicha and Kaivalya Vohra (Stanford dropouts, aged 19).
● Mission: Revolutionize grocery delivery with ultra-fast 10-minute service.
● Name Origin: Inspired by "zeptosecond" (one trillionth of a second), reflecting speed.

Early Growth (2021–2022)

● Launch: Operated initially in Mumbai (2021), focusing on dark stores.

● Funding: Raised $60M in Series A (2021) from Glade Brook and Nexus Venture Partners.
● Expansion: Scaled to 10+ Indian cities (Delhi, Bengaluru, Hyderabad).

Unicorn Status (2023)

● Valuation: Hit $1.4B (June 2023) after $1.4B (June 2023) after $200M funding led by StepStone Group.
● Key Investor: Y Combinator (largest backer, rare late-stage bet).
● User Base: Reached 4M monthly active users (2023).
 Problem Analysis

Survey Insights Strategic Financial

Survey Link Responses Link
Frameworks
Through PESTEL and SWOT analysis, we found Zepto Analysis
Zepto’s P&L and Balance sheet reveals high cash burn
HYPOTHESIS HYPOTHESIS Users primarily utilise faces fierce competition and rising operational costs. Its
with low contribution margins, driven by logistics and
Zepto for small, immediate needs owing to the low AOV and thin margins challenge long-term scalability
discounts. Despite strong GMV growth, low AOV and high
convenience factor, avoiding larger discretionary despite. Porter's Five Forces Analysis reveals: Zepto
CAC impact overall profitability and unit economics.
purchases Users wish to see product suggestions based faces high competitive rivalry and low buyer switching
on their search history, purchase patterns and costs, putting pressure on pricing. The threat of new
trends/occasions Users are restricted in their choices due entrants and strong supplier power further squeeze
to issues with product availability and generic margins in an already low AOV environment.ong
recommendations Users would want to get rewards and customer loyalty.
incentives for frequently shopping on Zepto
Strategic Frameworks
Financial Analysis
P&L Report
Competitor Analysis
 Strategic
Recommendation
 1. Pantry Pulse
A Personalized Product Spotlight for Smart Replenishment

What is it?
Pantry Pulse is a dedicated product spotlight section designed to enhance user
experience by showcasing, Back-in-stock items, Dynamic product bundles and value
deals, Restock suggestions based on the user's past buying cycles

How does it work?

apping the Pantry Pulse icon opens a side panel showcasing:
Recently restocked favorites and previously unavailable items, Personalized
combos, value packs, and restock suggestions based on purchase history
 How Pantry Pulse
Helps?
01 02 03 04
Improved Discovery Personalised Shopping Reduced Decision Value Increased customer
satisfaction
Fatigue
Analysis of purchase patterns deals and combos saves users Finding desired products quickly and
By highlighting back-in-stock
time and effort efficiently and getting personalized
items, new arrivals, deals etc., helps the users suggest relevant
recommendations enhanced user
users can easily find relevant deals, leading to a more satisfaction and loyalty
products without browsing convenient efficient shopping
through the entire catalog experience .
2. Would You Pair
An interactive quiz where the user is suggested complementary item choices based on the product

This?
selections

How It Works?
Upon adding a product (bread, pasta etc.), the ‘Would you pair this?’ quiz will be triggered and two complementary options
will be shown for the products being added. Once the quiz is done, the user will be directed to the cart page where he can
find the selections made.

How would it help?

Increased engagement: The quiz format adds a fun and interactive element to the shopping experience Personalised
recommendations: By gathering and analysing user choices, the recommendations can be tweaked accordingly for future
purchases

Improved conversion rate: Highlighting relevant pairings can incentivize users to add more items in the cart, thereby
improving discovery and the average order value
 3. SMART BASKET
CHALLENGES
Example
“Build a balanced lunch basket” “Healthy breakfast
Smart basket challenges
builder” “Movie night munchies challenge” The
What is will comprise either
smart basket would suggest the products from
the time-bound or recurring
specific categories to be added for the challenges
feature? challenges with diverse
accordingly. Upon completing the challenge, the
themes to appeal to a
user would be rewarded with points that can be
broader user base.
levied on future purchases and freebies on their
next orders.
Increased engagement: The quiz format adds a fun and

How it interactive element to the shopping experience

Helps? Product discovery: Challenges encourage users to try new
products try new products through the smart basket
suggestions, helping users expand their shopping horizons
Future Contextual Awareness: Pantry Pulse will take into account
real-time factors like weather, time of day and upcoming

Scope events to personalize suggestion

Explainable AI: Develop explainable AI features within

Pantry Pulse to allow users to understand the rationale
Future behind bundle recommendations, fostering transparency
Scope
Integrations: Explore partnerships with complementary
services such as recipes. Pantry such as recipes. Pantry
Pulse will suggest users with recipes, calorie information
and other details based on the products selected

Continuous testing of design elements, layouts and

recommendation strategies recommendation strategies to
optimize user engagement.
 Conclusion
Strategy 1 : Dark Store Optimization: Key Focus: Reduce operational costs by streamlining dark store processes.

Tactics:

★ AI-driven inventory management (predictive ordering, reduced waste)

★ Automation for faster picking and packing
★ Optimized stocking strategies to maximize space

Strategy 2: Increasing Average Order Value Key Focus: Drive revenue by encouraging larger customer orders.

Tactics:

★ Personalized product recommendations

★ Strategic product bundling (complementary items)
★ Targeted promotions based on purchase history

Dual strategy = lower costs + higher revenue per order → Long-term

competitive edge in quick commerce.
 Team
Micheal Prasant Akshata K Raj Roshan Shreya Sahni Yasir Ahamed

Thank You :)