How Zepto Became India's Fastest Growing Startup
Did you know that Zepto, a grocery delivery startup in India, achieved a staggering 200 million orders in just six months? This remarkable growth story is not just about numbers; it's about a vision to revolutionize the grocery shopping experience in India.
The Vision Behind Zepto
Aadit Palicha, co-founder and CEO of Zepto, believes that India has a once-in-a-generation opportunity to build a world-class internet company. He emphasizes that the journey is not just about financial gain but about the love of building something meaningful. "I genuinely believe we've got a once in a generation opportunity to build a world-class internet company out of India," he states.
When Zepto started, the grocery delivery space was already crowded with big players like Swiggy and Amazon. However, instead of following the traditional supply chain model, Zepto focused on a user-first approach. This shift in perspective allowed them to innovate with a 10-minute delivery model, which resonated with Indian consumers accustomed to quick, local shopping experiences.
Customer-First Approach
In the early days, Zepto's strategy was not about grand ambitions but rather about understanding user needs. Many competitors were building their models backward from supply chains, focusing on longer delivery times. Zepto, on the other hand, prioritized customer retention and satisfaction. By offering a 10-minute delivery service, they created a product that not only appealed to users but also improved their financial metrics.
The insight was clear: if you build a better product for users, you end up with better economics. As Aadit explains, "If users love the platform, your CAC is lower, and your throughput into your supply chain is much higher." This customer-centric approach has proven to be a game-changer in the competitive landscape.
The Early Days and the Spark of Innovation
Aadit and his co-founder, Kaivalya Vohra, began their journey during the pandemic, initially delivering groceries for neighbors through a WhatsApp group. This grassroots effort evolved into a more structured service, leading to the creation of Zepto. Their first significant interaction with customers was through this informal delivery service, which laid the foundation for their business model.
The first product they launched was called Kirana Card, a pickup and drop service inspired by local mom-and-pop shops, known as kiranas in India. The name itself reflects the cultural context of grocery shopping in India, where small local stores dominate the market.
The Power of Speed: 10-Minute Delivery
The decision to offer 10-minute delivery was not merely a marketing gimmick; it was a necessity driven by consumer behavior in India. Unlike in the US, where consumers might buy in bulk, Indian shoppers prefer frequent, smaller purchases. This insight led Zepto to refine their delivery times, ultimately settling on the 10-minute promise.
Aadit recalls, "Customers kept telling us that they would much rather just go to their fruits and vegetables guy in the morning. Why wait for 2-3 hours?" This feedback loop was crucial in shaping their service model and ensuring it aligned with consumer expectations.
Learning Through Unscalable Efforts
In the early stages, Zepto's founders engaged in unscalable tasks, such as making deliveries themselves to understand the customer experience better. This hands-on approach allowed them to gather invaluable feedback and iterate on their service. "We went to one of the stores on the platform and basically commandeered the store ourselves," Aadit shares. This direct involvement helped them identify key areas for improvement and ultimately led to better customer retention.
Navigating Challenges and Building Resilience
The journey has not been without its challenges. Zepto faced existential crises, especially during the tumultuous period of 2022 when capital markets were unstable. Competing against well-funded rivals with significantly more cash on hand forced Zepto to focus on operational efficiency and execution excellence.
Aadit reflects on these moments, stating, "Execute or die was the philosophy in 2022-2023." This pressure ultimately led to a more robust business model, allowing Zepto to thrive even in challenging circumstances.
The Future of Zepto
Looking ahead, Aadit envisions Zepto as more than just a grocery delivery service. The company aims to become a hyper-local everything store, expanding its product offerings and enhancing customer experience. With innovations like Zepto Cafe and a growing advertising business, the potential for growth is immense.
"We're building out an internet supermarket chain," Aadit explains. The goal is to create a platform that not only meets grocery needs but also caters to a wide range of consumer demands.
Conclusion
The key takeaway from Zepto's journey is to prioritize customer needs and embrace innovation. As Aadit Palicha emphasizes, the focus should always be on building something exceptional for users.
What challenges have you faced in your entrepreneurial journey, and how did you overcome them?