Zepto: A unicorn in q-commerce.
Online grocery apps are growing steadily, and during this pandemic, the app store is swamped with such apps. However, an app called, Zepto, is disrupting the quick commerce segment in India. Its’ unique selling proposition is “Groceries delivered in 10 minutes”.
While apps like Grofers, Swiggy, Instamart are in this competition of ultra-fast delivery, Zepto’s value proposition of — groceries delivered in 10 minutes; no minimum order; free delivery; and its extended delivery window from 7 a.m. to 1 a.m.; is enticing the customers, thus reporting a monthly growth rate of 300% in customer count and a monthly retention rate of 65%.
Being a product enthusiast, I was interested to know how is Zepto keeping its business.
I used the Business Model Canvas to carry out a high-level analysis and do a visual representation of the 9 key building blocks that form the foundations of Zepto.
Some of the key strategies that set Zepto apart from its’ competitors are:
Market Gap:
Although Zepto started off with a slower delivery business model with one-hour delivery, it later pivoted and entered into the q-commerce market segment when it noticed frustration among customers who are waiting for essential merchandise.
The Dark Store Model:
Zepto set up a network of retail distribution centers that operate in a hub and spoke model with every distribution acting as a hub to nearby points of delivery. Zepto is focused on a model where its’ delivery partners operate in a 3km radius.
Optimized network:
Zepto utilizes location intelligence, geography, population, road patterns, traffic dynamics, weather, and so on, to set up these dark stores at strategic locations and is able to curb the challenges, like, traffic congestions, navigation, and connectivity.
Technology:
Zepto bolstered its’ model with analytics and restricted the stocks at these ‘dark stores’ to a focussed set of about 3,000 high-demand items. Further, Zepto’s AI-powered tools keep track of inventory stock and product assortment.
Frictionless Delivery:
The dark stores cater exclusively to online orders and are specifically designed for easy navigation, allowing packers to move as quickly as possible to pack the items in an order. This optimized the order processing and dispatching time to less than 60 seconds.
Conclusion:
While Zepto’s current target customers are tech-savvy millennials and GenZ shoppers from metros, Zepto is expanding its coverage to other major cities very soon. Zepto’s razor focussed approach, quick response to customer sentiments, optimizing the online delivery process at every step, has helped provide a frictionless grocery delivery experience to its customers with a median delivery time of 8 mins 47 seconds.
