How much cash is Zepto even burning?
I get “Xrs” credited in your wallet text like every 10 days. How is this even sustainable?
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Curated from across
FluffyNugget
Plivo10mo
Idk but hopefully it doesn’t die out like Dunzo
GroovyPanda
Good Company10mo
Dunzo atleast has a reliance backing, which after some point will take over completely but Zepto i dont think so. I think zepto would be soon following byejus
FluffyNugget
Plivo10mo
Nah I doubt. If Zomato and Swiggy can show positive signs then this will too
FuzzyNarwhal
Wayfair10mo
I think Zepto will eventually die by the end of the year. Quick commerce is a tough game to crack in Indian market. Too much investment for too little margin. Not sure how much Zeptos investors are willing to burn more. I really wish they survive but possibility looks bleak looking at their balance sheet
MagicalMarshmallow
Dunzo10mo
But quick commerce is something that is becoming essential in metros so you think there will only be 2 players left? Swiggy and blinkit?
PrancingPenguin
Jio10mo
If you are making 15% gross margin (even this is a a lot since lot of products have margin less than 10%) on the cart value, the unit economies will fit at at least a cart value > 350 (assuming delivery costs are around ~30-50 INR per order). A part of this can be recovered via let’s say advertising revenue. Even then your cart value should be >250 (at least to be contribution margin positive).
They start their free deliveries at 99 (for user acquisition) and retention, then at 199.
So eventually they are assuming that
- The user would be retained & at some point the LTV would cover the acquisition costs
- The cart value would eventually grow from ~100 to ~300
Blinkit has gone public hence they can’t burn money, Zepto is still private so they can. Swiggy aims to go public hence it too is not going that path. Ultimately this would stop even for Zepto in case they wish to survive. So make hay while the sun shines.
GroovyPanda
Good Company10mo
I think the model is feasible only in a couple of cities that too in some richy rich neighborhoods. Instead of spending 50₹ on delivery charges, I would be better walking down to the grocery store around the corner. Apart from delivery charges I dont see any way to make profits. The margins are very thin on products. Adding on the lucrative discounts, delivery partner pay, itself makes the pnl negative. And we haven't even considered the marketing costs😂