How Zepto under Aadit Palicha and Kaivalya Vohra is redefining quick commerce by going beyond the 10-minute buzz

WHEN CHILDHOOD FRIENDS Aadit Palicha and Kaivalya Vohra first dabbled in hyperlocal delivery by launching Kiranakart in August 2020, the opportunity clearly was to solve for the hundreds of families in their neighbourhood in Mumbai’s Andheri [East] who were stuck in their homes. It was the Covid-19 lockdown and consumers were more than willing to pay a premium to get basics delivered to their doorstep. The duo took orders on a WhatsApp group and personally delivered — milk, groceries, and even meat — on bikes within 40-45 minutes. A few months later, when they started expanding to the adjoining localities of Juhu and Bandra, they built the Kiranakart app and tied up with local retailers to source the goods.

However, within a year, consumer preferences changed. The lockdown ended, and consumers were back to shopping from neighbourhood stores. “They wanted more consistent delivery because their options [kirana stores] were just 300 metres down the road,” says Palicha. Their customers told the duo that they were using them because of the pandemic, “and if we didn’t deliver at speed, offer a wider selection, and not keep quality [under] control, they wouldn’t use us,” he recalls.

This led to the birth of Zepto, where Palicha is now co-founder & CEO, in July 2021. It promised to deliver in 10 minutes — and to do that, the Zepto boys [both 19 then] decided to go the ‘dark stores’ way. They set up micro-warehouses in every locality from where orders were delivered to consumers’ homes; and instead of picking up orders from local retailers, they invested in a robust supply chain for groceries, vegetables, and meat.

The promise of delivering in 10 minutes generated a lot of excitement, but the market was sceptical; and it had reasons to be so. Global e-commerce giants had burnt their fingers with this model — profits were nowhere in sight and several smaller players had even gone bankrupt. The critics were of the view that there was no way a 10-minute delivery model would work, even in the medium term. But the Zepto boys have proved even the harshest of critics wrong, with the company claiming that it had done business close to ₹10,000 crore in calendar year 2024; in FY23, the number was ₹2,078 crore.

“There is a prototype,” says Angshuman Bhattacharya, national leader, consumer products and retail sector, EY. “If it is a matured city like Mumbai, it is making money. Then there is an expansion and investment part of the business when you enter a new city. The P&L may still bleed because there is rapid expansion happening, but in larger cities, the network productivity is higher than foodtech.”

Zepto is close to breaking even in terms of Ebitda, says Palicha. Today, it has more than 700 dark stores and over 15,000 stock-keeping units [SKUs], with the average order value being close to ₹600. Quick commerce, a $2.8-billion industry, has become an integral part of any consumer goods company’s distribution strategy. And brands are innovating especially for quick commerce platforms.

“It’s not about 10-minute delivery. People in India like high-frequency, low-stakes purchases. Most consumption in India has a frequency of two-three times a week, unlike in the U.S. where people buy in bulk. You need proximity to the customer for delivering three times a week. Also, deliver a [wide] selection, quality and good value proposition,” says Palicha.

Zepto is now valued at $5 billion and has received more than $1.5 billion in funding so far. “The name of the game is optimising every element across the supply chain. Whether it is vertical integration for better supply chain management, throughput for sq. ft management, manpower productivity, network design across dark stores, driving more ad revenue from brands or building new categories, we have done that pretty rigourously in the past two years,” says Palicha, adding that in Q1FY25, Zepto was close to Ebitda break-even at the company level [excluding ESOPs]. “Around 70% of our dark stores are cash-flow positive. Earlier, it took 23 months for a dark store to turn profitable; now it takes eight months,” says Palicha.

Earlier, the capital required to launch a dark store and turn it profitable was around ₹3.91 crore. That has come down to ₹1.54 crore. “We reached $1 billion top-line faster than Flipkart. It took Flipkart four years. We did it in two-and-a-half years, with a fraction of the capital. It’s all about deep execution and excellence,” says Palicha.

Zepto is no longer restricted to groceries, meat and vegetables. When the world was queuing up at Apple Stores to buy the latest iPhone 16, Zepto promised delivery in 10 minutes. From a fancy Manyavar kurta to a quick snack from Zepto Café, the quick commerce platform is leaving no stone unturned to offer convenience to Indian consumers.