Less than a year since its launch in July 2021, Zepto - the newest kid on the quick commerce block, has been giving other established players in the category a run for their money, by promising and, more importantly, delivering on its promise of 10-minute grocery delivery in tier 1 cities.

In an exclusive interaction with Indiantelevision.com, Zepto’s chief marketing officer, Amritansu Nanda spells out the specifics behind the company's rapid growth in such a brief period. He also tackles some ‘myths’ around the 10-minute delivery model, while addressing the backlash that the very concept of “quick delivery” has been receiving in recent times for putting undue stress on delivery agents.

Nanda also weighs in on the value-add the company hopes to garner through its IPL campaign debut featuring celebrity singers this cricket season, even as he declined to comment on whether the “surge pricing” introduced by rival app, Blinkit would be replicated or adopted by other players on the quick-comm block, such as itself.

As per a recent market report released by Bobble AI Data Intelligence Division, the quick delivery app founded by two 19-year-old Stanford dropouts, Kaivalya V. and Aadit Palicha, witnessed a whopping 946 per cent user growth between December 2021 and March 2022, as against the 94 per cent and 58 per cent growth achieved by rivals Dunzo and Big Basket, respectively. The privacy-compliant study also revealed that the relatively new entrant Zepto had the highest active users on their app month on month, during the same period.

Earlier this month, the delivery startup announced its $200 million Series D fundraise, valuing the company at around $900 million, led by investors Y Combinator Continuity and backed by some of its key existing investors, including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom, who have increased their investments in the company as well.

An alumnus of Indian Institute of Technology, Delhi and Indian Institute of Management, Calcutta, Amritansu Nanda served as former head of marketing at Pepperfry and head of digital marketing & D2C at FACES Cosmetics India. He was the co-founder of Ziptest in 2016 and also had a brief stint as senior analyst at Goldman Sachs.

Edited Excerpts:

On reason behind the grocery startup’s stupendous growth in such a short period of time

We started operations towards the end of July 2021, August being our first full month. Since then, we have seen a meteoric rise in our business. Over the past few months, we have grown more than 800 per cent Q-o-Q. All of this has been achieved not only by acquiring customers very efficiently and very quickly, which of course, has happened through our variety of marketing channels- both offline and online. But it is also because customers loved the experience and they decided to stick with us. Our first month user retention is at 61 per cent, and our NPS (net promoter score) is 88 - one of the highest in the e-commerce industry, which is an indicator of how happy customers are and how likely they are to be promoters or advocates of the brand.  
For sure, we have seen a massive increase in business. Our expansion into the geographies, going deeper into the top ten cities - all of that has aided our growth significantly. But at the end of the day what’s really important for us is that the (buyer) retention rates remain very high. Which means that the customer experience that we are providing has to be phenomenal, and that is where our focus is. We have our heads down, focusing on delivering on that promise day in, day out.

On thriving amid inflation, supply chain issues & changing consumer sentiments during the pandemic

We actually launched after the first and second waves of the pandemic, so we did not benefit (or suffer) from the lockdowns, when I think e-grocery as a category saw a significant surge. But despite that, the adoption and consumer love we have seen has been phenomenal. And that’s all down to the seamless brand offering that we have. Through all of the macro-economic information out there, there is definitely going to be some decisions that consumers will be making, but at the end of the day, the fundamentals don’t change much. And the fundamental is that if convenience-seeking consumers can get great, reliable service that provides quality assortment at affordable prices then I don’t think other environmental parameters will play much of a role there. And for the same reasons we have been quite unaffected through the inflation and supply chain issues.

On the IPL campaign debut

Indian Premier League (IPL) is a very interesting property, it’s the largest media event of the country. And it so happened, when IPL was kicking off this year, at the same time we also had a close to 80 per cent coverage of the top ten cities. Which was like a tipping point for us, that here on, we will only increment our user base. So there was a nice juxtaposition of the two events.

Meanwhile, we also saw that all our earlier communication had been very rational and functional in terms of the app’s benefits. But IPL actually provided us the opportunity to move deeper into the consumer psyche. We identified what’s the core insight that we want to tap into. And that core insight was that "Indian Stretchable Time", has become a core reality in our country. And we then tried to create a sharp contrast with how the  Indian Stretchable Time  is ubiquitous with consumer lives, but Zepto is a welcome exception to that unsaid rule. That’s where the whole concept of ‘Ye time kheechne ki aadat se pareshaan’ came along. The basic concept being that most other services in the country seem to not value the consumers’ time as much, but Zepto does. So it was more of an emotional connection between the brand and our consumers, which is where we feel that we have evolved and come a long way to having so many layers in our communication. It was a coming-of-age period for the Zepto brand. No doubt, having celebrities in the campaign also helped increase the appeal and humour quotient of the creatives.  

On Zepto’s current consumer demographic

Currently we are present only in the top ten cities, so it's natural most of our consumers are from there and within these cities our footprint is increasing consistently. In terms of TG, we are focused on millennials and Gen Z, while there’s also a significant chunk of our customers that are Gen X and above.

On the criticism surrounding concept of “quick delivery”

We respect the origin of this concern, the idea around it being- is it an indulgence which is unsafe for someone else - and that’s a point of view that’s worth appreciating. As a consumer, I would be really concerned if a business model would not be taking everyone into account. Having said that, we would like to tackle some myths around it. First of all, our delivery partners don’t ride fast, they are not supposed to. Our average distance for delivery is 1.8 kms and the average delivery time is ten minutes. If we do the math, it's less than 12 kms per hour on average, which is really low! so it’s difficult to imagine that by design any of our delivery partners (by following this stipulation) would be endangering lives, in general.

We realise, however, that people are probably not doing the math because it’s scattered information. Which is why, we now have the speed of delivery mentioned on the app itself. As soon as one places the order, they get to know the name of the delivery partner, the location status of that partner, and the speed at which he or she will be driving. And in most cases it’s less than 20 kms per hour. So I think the idea has started seeding now, that we are not a fast-driving delivery company, we are just a fast delivering company, and the fast delivery happens because we are very close to you, and not because we are driving faster.

Additionally, for our delivery partners in particular, there is no inherent stress at all, as there is no incentive if they deliver on time even as there is no penalty if they are late in delivering. It's our belief on the conscientiousness of the consumers, whenever there is any delay we mention it through our communication on the app, through our push notifications that there might be a delay because of traffic or rains etc. We have seen that customers really understand, that’s why we are all on the same team.

The only thing to be aware of is that, by design, our 10-minute delivery model is significantly safer than any other hyper-local delivery format because of the shorter distances involved. Additionally, we also have a good physical presence so our delivery partners operate constantly in that same community. We want to grow with the community and become a vibrant part of it. We are trying to create a massive win-win scenario for everybody.

On the marketing road map ahead for Zepto

Our major focus is going to remain the top ten cities itself, because it’s a massive opportunity and there’s a long way to go within these markets itself. Having said that, expanding into other geographies is not off the table but our key focus is to go deeper into the existing markets.