Zepto – 10-min grocery delivery service

Avil Saldanha

n 11 July 2022, Aadit Palicha and Kaivlya Vohra were in a deep discussion about Avil Saldanha is based at

O the future of their start-up Zepto. The unique selling proposition of Zepto was a 10-
min grocery delivery (Inventiva, 2022, July 1). This caught the attention of investors
the Department of
Marketing, St. Joseph’s
Institute of Management,
as well as customers. Zepto was growing rapidly and had operations in select major
Bangalore, India.
metropolitan cities in India. However, the 10-min delivery model attracted a lot of negative
publicity on social media. Concerns were raised by some members of the parliament over
the safety of the delivery partners as well as overall road safety due to reckless driving by
delivery partners trying to meet the 10-minute delivery deadline (Mittal, 2022, June 7). Some
delivery partners of Zepto had anonymously spoken to the media regarding the pressure
involved in 10-min delivery (Babu, 2022, April 11). There was a demand by vocal netizens
and social media activists to ban the 10-min instant delivery apps (Bhalla, 2022, March 1).
Customer complaints and negative customer reviews on social media about the quality of
products and delivery time were issues that needed immediate redressal. Due to these
pressing concerns, the young founders were in a dilemma whether to continue with the
10-min delivery model or to increase the delivery time to 15–20 min.
Another concern faced by these young entrepreneurs was stiff competition from the well-
funded online grocery delivery big players like Blinkit, Dunzo, Amazon Fresh, Flipkart
Supermarket and Big Basket. Blinkit was its direct competitor also offering 10-min instant
grocery delivery. Blinkit (earlier known as Grofers) was well-funded and backed by Zomato
(The Economic Times, 2022, June 24). Blinkit’s founders and operations team had vast
experience running the online grocery delivery business. Dunzo had a 19-min instant
delivery model for groceries. It was not very difficult for these major competitors to replicate
Zepto’s business model due to their technological expertise, existing delivery system and
deep pockets.

Overview of the Indian grocery e-commerce market

The Indian grocery e-commerce market was estimated to grow to around $25bn by 2025.
The research firm Sanford C. Bernstein’s report mentioned that online grocery penetration
was expected to reach approximately 3%–5%, by 2025. Long-term structural drivers were:
rising income and affluence, lower-tier consumption, e-commerce penetration
(approximately 30% CAGR) and a young population (approximately 50% below 25).
Grocery spending as a proportion of income remained high at approximately 30%
(Sridharan, 2022, March 29).
E-commerce had become an easy adoption facility due to the availability of cheaper Disclaimer. This case is written
solely for educational purposes
internet data, and the excess of smartphones with cost barriers being slashed. This trend and is not intended to represent
was not just restricted to top Indian cities but was well accepted across the Indian successful or unsuccessful
managerial decision-making.
geographies and socio-economic consumer segments. Also, the majority of Indians were The authors may have
disguised names; financial and
less than 30 years of age bracket. Hence, the concept of instant gratification was a other recognizable information
consumer priority. This sparked the 10-min delivery trend. Instead of planning their grocery to protect confidentiality.

DOI 10.1108/EEMCS-10-2022-0372 VOL. 13 NO. 2 2023, pp. 1-15, © Emerald Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
 shopping in advance, the younger audience was using multiple unplanned and last (10)-
min shopping to get their groceries (Sridharan, 2022, March 29).

Inception of Zepto
Zepto, an instant grocery delivery service, was founded by Palicha and Vohra in 2021 when
these entrepreneurs were teenagers of 19 years each. They had left Stanford University’s
prestigious computer science department to return to India and establish a business
(Madhukalya, 2021, November 12).
Palicha started GoPool which was a mobile application that helped Dubai parents find and
schedule carpools to school when he was just 17. In 2020, when Coronavirus created havoc
in the world and confined humans to their homes, Palicha and Vohra came up with the idea
of KiranaKart. Its business model involved delivering groceries to customers’ homes in just
a few hours by partnering with local grocery stores in Mumbai also called Kiranas. This
service was useful during the lockdown as people were stuck in their homes. In the
operations of KiranaKart, a pattern was observed. They detected that for deliveries
completed in 45 min to 1 h, repeat order of those customers was placed 20% of the time.
But for deliveries completed in 20–30 mins, the return order of those customers was placed
40%–50% time. Studying these patterns regularly, Palicha and Vohra discovered a lot of
aspects of Indian consumer behavior and after that, they shut down KiranaKart completely
and started Zepto (GenZtimes, 2022, March 16).

Zepto – Growth
Zepto had operations in Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Chennai, Pune
and Kolkata. Its technical office was in Bengaluru, while its headquarters was in
Mumbai. Zepto had hired key executives from Dream11, Flipkart, Pharmeasy, Uber and
Pepperfry. Zepto CEO, Palicha claimed that month-over-month growth was 200%, with
a monthly retention rate of 78%. “We are looking at a pretty crazy run rate,” he said. “In
the past one and a half months, we have grown our business by 10 times. And now we
are working to grow another 10 times by February or March,” said Palicha (GenZtimes,
2022, March 16).
Zepto, when it was a five-month-old startup, had secured a valuation of $570m after raising
$100m in a Series C round headed by Y Combinator’s Continuity Fund, which was a 2X
increase from its previous valuation of $60m only 45 days before that. Zepto raised another
round led by Y Combinator to lift its valuation further to $900m. Another positive
development for Zepto was the expertise it had been able to acquire. They originally
launched with a different model, swiftly pivoted to quick commerce in August 2021 and
were adding 100,000 new customers every week, 60% of them women (Anand, 2022,
June 29).

Zepto – business model and revenue model

Zepto operated in the quick commerce segment of India. It was designed to be
customer-centric and built around the instant service model. Zepto CEO Palicha
claimed that it maintained its average delivery time as 8 min and 47 s to ensure flawless
deliveries to customers. Through a chain of dark stores or retail distribution centers,
Zepto used a hotspot method to cater largely to digital purchases (GenZtimes, 2022,
March 16).
A dark store was a tiny neighborhood storehouse that was not open to customers but was
used by the online retailer for stocking products. Zepto optimized its rapid delivery by
taking traffic dynamics, road patterns, population, weather conditions, topography, last-mile
operational improvement and other local intelligence and geographic data. Moreover,

PAGE 2 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 13 NO. 2 2023

Zepto’s dark warehouses were custom-designed to satisfy particular criteria such as ease
of travel, allowing packers to move as swiftly as possible to fill orders (GenZtimes, 2022,
March 16).
Zepto model and store mapping ensure that its rider partners operate in a much smaller
3-km radius around the same dark store, building greater familiarity and lowering
uncertainty and anxiety around customer drop points. And in case a delivery is taking
significantly longer than expected, their grievance redressal team quickly reaches out
to assist Zepto delivery partners and take remedial action immediately (Malik, 2022,
January 25).
Zepto was “hyper-focused” on speed and this differentiated it from big competitors like
Swiggy, Big Basket and Amazon Fresh which competed on price by providing high
discounts. As illustrated in Figure 1, Zepto used dark stores in the neighborhood. To
ensure speedy deliveries, Zepto followed the PPB formula which involved Picking,
Packing and Bagging. Picking was done quickly in all stores of Zepto. In their dark
stores, all the employees had tablets and when an order was placed it came to the
central hub, from that hub the order reached the dark store and from there, it would be
given to employees as all things were reflected on their tablets. The items in the order
and which item was placed in which place as well as which shelf was displayed on the
tablets. In the packing stage, all the items were collected and packed quickly. In the
bagging stage, the delivery agent got the order in hand and left the warehouse
immediately for delivery. Zepto ensured that the lead time in all three activities picking,
packing & bagging would be 60 s. This meant after giving an order till the customer
clicked on the check order tab, the customer’s order would be dispatched from the
warehouse (GenZtimes, 2022, March 16).

Figure 1 Dark store

VOL. 13 NO. 2 2023 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 3

 Instant grocery delivery players
Instant Grocery Delivery was the new trick among app-based online delivery platforms.
Technology and fulfillment centers were the key requirements for attempting 10-min
delivery. The following apps offered 10-min delivery service in India:

Blinkit
Blinkit (previously known as Grofers) had its headquarters in Gurgaon, it delivered groceries
and essential items within 10-min time. This instant delivery service promised genuine
products and also a 100% replacement guarantee. Blinkit started the trend of 10-min
delivery of groceries. Blinkit primarily delivered groceries, fresh fruits, vegetables, meat,
stationery, bakery items, personal care, baby care and pet care products, snacks, flowers,
etc. (Yo! Success, 2015, 10 July). Zomato (Online food delivery platform) acquired Blinkit
for Rs 4,447 crore in an all-stock deal (Arora, 2022, June 29).

Swiggy Instamart
Swiggy’s Instamart service was available in Delhi-NCR, Mumbai, Bangalore, Hyderabad,
Pune and Chennai. Instamart was a chain of online convenience stores. Instant meals,
snacks, fruits and vegetables, ice creams and other things were available through these
virtual convenience stores. Swiggy provided these things through its partner Dark Stores
(Patel, 2022, February 2). Instamart delivered groceries and essentials in around 15 to
30 min. Instamart service was available on the home page of the Swiggy app. The users of
Swiggy could access this instant delivery service and could order using the app (The Indian
Express, 2022, March 23).

BigBasket’s BBNow
BBNow was Big Basket’s instant grocery delivery service. It was a part of the Big Basket
App and could be accessed by anyone who had the Big Basket App. The promised
delivery time was 10–20 min. In case of failure, a 5% cashback was promised subject to
some terms and conditions like peak hours and extreme traffic. BBNow offered deliveries
within a radius of 1.5–2.5 km with access to inventory comprising over 3,000 products
across categories including ready-to-cook and eat, beverages, fresh fruits and vegetables,
cleaning, beauty and hygiene and more (Rudra, 2022, April 21).

Dunzo Daily
Dunzo Daily delivered groceries, medicines, essentials, fish and meat. It also had a pickup
and drop service for couriers, parcels, documents, etc. This Reliance-backed company
was also working on order processing automation, drone deliveries and more dark store
setups. Its uniqueness was that it had tie-ups with retail general stores to fulfill customers’
grocery needs along with having its own inventory. Dunzo was offering its ultra-fast grocery
delivery service Dunzo Daily in Bengaluru, through which it would deliver essentials
comprising 2,000 products in 19 min (Desidime, 2023, January 3).

Criticism of the 10-min delivery model by industry experts

The industry experts were of the opinion that though the fast delivery of services looks good
from a customer’s point of view, it could set a dangerous precedent, which could have
devastating effects on delivery partners’ well-being in the long run. The delivery partners,
who often did 10–12 h shifts every day, were under immense stress. Complaints were
lodged against riders every day for flouting traffic norms as they were often in a rush to
deliver household items within the deadline. They were at constant risk of accidents. Low

PAGE 4 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 13 NO. 2 2023

income, the rising cost of living and high fuel prices, and issues in personal lives could take
a toll on such individuals, opined health experts (Sharma, 2022, April 19).
Despite disclaimers from the quick grocery delivery apps, the 10-mi delivery feature had
attracted a lot of criticism. People had gone ahead to call this move “inhumane”,
“insensitive” and even a “10-min murder”.
Sharing his thoughts on the new style of service, Tata Memorial Director Pramesh CS said
that 10-min delivery for groceries was “inhuman to the delivery person”.
He said that customers can live with not getting a 10-min delivery. “I don’t care how many
trolls I get with this tweet [. . .] Just stop it! Customers can live with a 2 or even a 6-hour
delivery time,” he added.
Well-known industrialist and chairperson of Mahindra and Mahindra group, Anand
Mahindra quote-tweeted the post, and wrote, “I agree”. (The Economic Times, 2022,
April 18).

Criticism of the 10-min delivery model by members of parliament

Congress leader and MP Karti Chidambaram on Monday said that Zomato’s plan to deliver
food to its customers in a record 10 min is absurd. “This is absurd! It’s going to put undue
pressure on the delivery personnel, who are not employees and who have no benefits or
security, who have no bargaining power with Zomato,” tweeted Karti Chidambaram. “I have
raised this in Parliament and have written to the government. Will pursue this further”.
(Moneycontrol News, 2022, March 21).
Training guns on quick commerce startups, Trinamool Congress Member of Parliament
(MP) Mahua Moitra had called for regulating 10-min deliveries. “10-minute deliveries need
to be regulated/outlawed. No civilized society can be incentivizing delivery executives to
break traffic rules and put (their) own and others’ lives at risk. All for a quicker pizza,” the
MP from West Bengal’s Krishnanagar said in a tweet. She also said that she would raise the
issue in Parliament (Thathoo, 2022, May 31).

Mounting customer complaints

In its pursuit of speed, Zepto faced several customer complaints and negative reviews in
digital forums and social media. Some of the sample negative reviews were as follows:

Bad delivery service

I ordered in Zepto but I did not receive the product, but they updated it as delivered. After
so many calls I got my product after 2 h. The first delivery person was rude. Totally ruined
my mood (MouthShut.com, 2022).

They provide pesticide-contaminated fruits and veg

We bought Jamun fruit from their website. They provided pesticide-contaminated Jamun
fruit. After eating that fruit, we were hospitalized due to stomach pain and diarrhea. They are
cheaters (MouthShut.com, 2022).

Do not deliver all items

They charge you the whole amount and do not deliver all items. On raising a complaint, they
just mention that they have delivered all items. So, they do not refund the amount and also
do not deliver the missing item (MouthShut.com, 2022).

VOL. 13 NO. 2 2023 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 5

 Worst app worst service
Today I ordered 450 ml of Baskin Robbins ice cream but I received a broken box, all the ice
melted. Half of the ice cream was missing; I took a photo and sent it to customer care. But
they told me they sent a good product and closed the chat. They are not responding
properly; they take too long to reply. Worst service, not fit to do this business. They are not
worth a one-star rating (MouthShut.com, 2022).

Cheaters
A lot of issues with the orders. Either the brand of the product ordered is different or the
quantity ordered is not correct. They charge full but the order delivery has half the size. 10
mins delivery is of no use. If the product and quantity are wrong. And then you also need to
spend time complaining and getting a refund. They don’t redeliver your order (MouthShut.
com, 2022).

Facebook comments – doesn’t recommend Zepto

䊏 User 1: My order was not delivered, only after 1.5 h they canceled it. It was a prepaid
order. Worst delivery experience ever (Facebook, 2022).
䊏 User 2: Don’t buy fruits and vegetables in Zepto. Very bad experience. Bought two very
small pomegranates for INR 179, and that too tasted very bad. Same with the
vegetables. Groceries and milk products are good and the same as outside shops.
Highly not recommended for fruits and vegetables (Facebook, 2022).
䊏 User 3: They are cheaters [. . .] so don’t go with Zepto [. . .] Big Basket and Blinkit are far
better than Zepto [. . .] at least they don’t cheat people (Facebook, 2022).

Advertisements regulator show cause notice to Zepto

The advertisements regulator questioned Zepto, over whether its ads in a newspaper
promote rash driving by its delivery riders. The Advertising Standards Council of India
(ASCI) issued a show cause notice to Zepto, following a consumer complaint against a
pamphlet ad supplied by The Times of India. Isn’t it dangerous and not practical all the
time? Dangerous because for achieving the time period the delivery person will take risk
while riding on the road as he/she needs to reach in 10 min," the unnamed complainant is
quoted in the notice. Zepto replied to ASCI last week arguing that its dark stores/
warehouses were optimized for quick delivery and were conveniently located within 2–3
kilometers in high-density areas, due to which riders didn’t have to ride long distances,
reducing road danger (Sriram, 2022, February 3).

Way forward
Palicha and Vohra’s brainchild Zepto had been rolled out in three major metropolitan cities
but some deliveries took 15 to 30 min. There were issues with Zepto delivery partners
marking the order as delivered before actually delivering it to meet the 10-min delivery
deadline. This created dissatisfaction and complaints from customers. There were also
customer complaints on social media about quality issues.
The criticism by members of parliament on Twitter about the 10-min delivery model was
another setback in terms of negative publicity. Leading industrialist Anand Mahindra
expressed his displeasure with the 10-min delivery model on Twitter. ASCI had questioned
Zepto about the road safety concerns due to its 10-min delivery advertisement.
Palicha had clarified the concerns raised by the stakeholders and the public but a
significant proportion of stakeholders were not convinced about the safety aspect. The

PAGE 6 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 13 NO. 2 2023

delivery partners had raised concerns on social media about the low pay and inflexible work
conditions at Zepto.
The following questions persisted in Palicha and Vohra’s minds:
Keywords:
䊏 Should Zepto continue to operate in the 10-min delivery model or should it increase the Customer satisfaction,
delivery time to 15 to 20 min? Customer service,
E-commerce,
䊏 How to convince the stakeholders like parliamentarians, influential netizens, Entrepreneurship,
government regulators, traffic police and the general public that Zepto’s 10-min Marketing, Retailing, Zepto,
delivery model is safe? Customer complaints,
Online grocery delivery,
䊏 How to counter the negative publicity regarding poor quality products and inaccurate Instant delivery, Customer
delivery? dissatisfaction

References
Anand, S. (2022). Zepto success story - delivering groceries in 10 mins. StartupTalky. 29 June. Retrieved
from https://startuptalky.com/zepto-success-story/
Arora, S. (2022). Zomato acquired Blinkit for Rs 4,447 crore in all-stock deal. Adda247. 29 June.
Retrieved from https://currentaffairs.adda247.com/zomato-acquired-blinkit/
Babu, N. M. (2022). The risks they take to deliver your groceries in 10 minutes. The Hindu. 11 April.
Retrieved from www.thehindu.com/news/cities/Delhi/rash-driving-fall-in-income-more-pressure-behind-
the-scenes-of-10-minute-delivery/article65309591.ece (accessed 17 October 2022).
Bhalla, K. (2022). A netizen is seeking roll back of the 10 minute delivery feature on Swiggy, Dunzo,
Zepto and Grofers. Business Insider. 1 March. Retrieved from www.businessinsider.in/business/
startups/news/swiggy-dunzo-zepto-and-grofers-should-roll-back-10-minute-delivery-says-petition/
articleshow/89900739.cms
Desidime (2023). Top 8 instant grocery delivery apps in India 2023 (delivery in 10 minutes). 3 January.
Retrieved from www.desidime.com/news/top-5-instant-10-min-grocery-delivery-apps-in-india
Facebook (2022). Retrieved from www.facebook.com/Zeptonow/reviews
GenZtimes (2022). Zepto case study. 16 March. Retrieved from https://genztimes.in/zepto-case-study/

Inventiva (2022). Zepto business model: All you need to know. 1 July. Retrieved from www.inventiva.co.
in/trends/zepto-business-model/

Madhukalya, A. (2021). How two 19-year-old Stanford dropouts founded Zepto. Business Today. 12
November. Retrieved from www.businesstoday.in/latest/corporate/story/how-two-19-year-old-stanford-
dropouts-founded-zepto-312034-2021-11-12
Malik, B. (2022). Our riders operate within 3-km radius: Zepto on driver safety. Business Today. 25
January. Retrieved from www.businesstoday.in/latest/corporate/story/our-riders-operate-within-3-km-
radius-zepto-on-driver-safety-320344-2022-01-25
Mittal, P. B. A. A. (2022). Why nobody is talking about 10-minute deliveries anymore. The Economic
Times. 7 June. Retrieved from https://economictimes.indiatimes.com/tech/technology/startups-
recalibrate-approach-to-ten-minute-deliveries-amid-operational-challenges/articleshow/92045165.cms?
from¼mdr (accessed 17 October 2022).
Moneycontrol News (2022). ‘Absurd’: Karti Chidambaram slams Zomato’s 10-minute food delivery, says
will raise issue in parliament. Moneycontrol. 21 March. Retrieved from www.moneycontrol.com/news/
trends/absurd-karti-chidambaram-slams-zomatos-10-minute-food-delivery-says-will-raise-issue-in-parliament-
8257501.html
MouthShut.com (2022). Retrieved from www.Mouthshut.Com.https://www.mouthshut.com/software/
Zepto-reviews-925991265
Patel, N. (2022). What is Instamart & How it works? j Swiggy Instamart near me details. Proudly.in. 2
February. Retrieved from https://proudly.in/swiggy-instamart/

Rudra, T. (2022). Tata’s BigBasket enters the qcommerce segment with BBNow. Inc42 Media. 21 April.
Retrieved from https://inc42.com/buzz/tatas-bigbasket-enters-the-qcommerce-segment-with-bbnow/

VOL. 13 NO. 2 2023 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 7

 Sharma, M. (2022). What’s the hype around 10-minute delivery concept? Pros & cons. 19 April. Retrieved
from www.fortuneindia.com/enterprise/whats-the-hype-around-10-minute-delivery-concept-pros-cons/
107834
Sridharan, S. (2022). India: 2-Minutes meal to 10-Minutes delivery. BW Businessworld. 29 March.
Retrieved from www.businessworld.in/article/India-2-Minutes-Meal-To-10-Minutes-Delivery/29-03-2022-
423897/
Sriram, M. (2022). Exclusive: Advertising regulator questions 10 minute delivery upstart Zepto over
‘potential. . .. Moneycontrol. 3 February. Retrieved from www.moneycontrol.com/news/business/
startup/exclusive-advertising-regulator-questions-10-minute-delivery-upstart-zepto-over-potential-
violations-8028791.html
Subramaniam, N. (2021). Founded by teens, Zepto raises $60 Mn to join online grocery race. Inc42
Media. 1 November. Retrieved from https://inc42.com/startups/zepto-looks-to-take-on-indias-online-
grocery-giants-with-60-mn-funding/
Thathoo, C. (2022). TMC MP Mahua Moitra slams 10-Minute delivery, calls for its regulation. Inc42 Media.
31 May. Retrieved from https://inc42.com/buzz/tmc-mp-mahua-moitra-slams-10-minute-delivery-model-
says-it-needs-to-be-regulated/
The Economic Times (2022). Anand Mahindra isn’t impressed with 10-min delivery, but gives Zepto boss
a “fair” chance to explain his 9. 18 April. Retrieved from https://economictimes.indiatimes.com/
magazines/panache/anand-mahindra-isnt-impressed-with-10-min-delivery-but-gives-zepto-boss-a-
fair-chance-to-explain-his-pov/articleshow/90910420.cms

The Economic Times (2022). Blinkit on Zomato plate: Board OKs Rs 4,447cr deal. 24 June. Retrieved
from https://economictimes.indiatimes.com/tech/technology/zomato-board-approves-blinkit-buy-for-rs-
4447-crore/articleshow/92440110.cms?from¼mdr

The Indian Express (2022). From Zepto to Blinkit, all the apps offering 10-minute delivery service in India.
23 March. Retrieved from https://indianexpress.com/article/technology/social/zomato-instant-zepto-
blinkit-apps-that-offer-10-15-minute-delivery-service-in-india-7831106/

Yo! Success (2015). Albinder Dhindsa the accidental entrepreneur. 10 July. Retrieved from www.
yosuccess.com/success-stories/albinder-dhindsa-grofers/

Corresponding author
Avil Saldanha can be contacted at: avilsaldanha@gmail.com

PAGE 8 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 13 NO. 2 2023