Zepto: Can It Sustain Growth through 10-Minute Delivery?

KiranaKart Technologies Pvt. Ltd. (Zepto) was a quick-commerce start-up founded by two 19-year-old Stanford University dropouts and operating in the Indian e-commerce market, one of the fastest growing in the world. Using a quick hyperlocal e-grocery delivery model, the company faced challenges during its post-pandemic growth; these included the viability of its disruptive model, the competition it faced, and a long wait for profitability. While the quick-commerce grocery delivery model, initially supported by a steady flow of funding from venture capital firms, faced close scrutiny the world over as the flow of easy money started drying up, not everything was ominous for Zepto. As August 2023 was coming to an end, the start-up found itself on a stable funding runway. However, critics raised doubts about the feasibility of its 10-minute delivery service. Every reduction in customer wait time led to an increase in costs, and there was no broader e-commerce or food delivery platform to synergize with. Moreover, there were also social costs associated with delivery. To sustain the next phase of growth, Zepto’s founding team had to consider various strategic options. They could commit to grocery and focus on high-margin items to increase the frequency and basket size of online grocery customers. Alternatively, they could aggressively re-launch Zepto Café to expand their product range, attract more customers, and increase average order value. Diversifying the company’s product categories by adding e-pharmacy or even electronics could be another option to win over more customers.

This case is designed for master of business administration (MBA) or executive MBA students to demonstrate the strategic challenges faced by early-stage start-ups with evolving disruptive business models in terms of growth, surviving competition, and customer adoption. The case can be used in core or elective courses on entrepreneurship, strategy, business models, e-commerce, or retailing. This case study tracks the remarkable growth of a quick-commerce start-up and introduces students to the challenges of building and sustaining innovative business models and breakthrough customer propositions in emerging markets. It gives students a strong understanding of building and sustaining value propositions and navigating sustainable growth tethered to profitability in a hypercompetitive market. Specifically, this case will help learners do the following:<br><br><ul><li>Understand the competitive landscape of emerging markets and the scope for business model innovation.</li><li>Evaluate the opportunities and challenges in designing, delivering, and sustaining breakthrough customer value propositions.</li><li>Analyze the challenges in scaling and sustaining disruptive business models in the context of hyper-competition.</li><li>Evaluate a sustainable growth strategy tethered to better economics for start-ups in dynamic industries.</li></ul>

• Business model
• E- commerce
• India
• Quick commerce
• Startinup
• hyper-local delivery
• e- grocery
• emerging markets