Company Background of Zepto

Zepto is run by Kiranakart Technologies Private limited. Zepto is the new grocery delivery
application which promises to deliver the groceries within 10 minutes of order placing. This
delivery within 10-30 minutes is the new trend that can be seen in maximum E-commerce
platforms. It is termed as Q-commerce (Quick Commerce). The Q-commerce businesses in India
are growing at around 25% higher than e-commerce businesses as per many reports. Currently
Zepto is available in big cities such as Bangalore, Mumbai, Delhi, Kolkata etc.
Aadit Palicha and Kaivalya Vohra, both 19-year-old childhood friends, created Zepto after
walking out of Stanford University's renowned computer science department to return to their
home, India, and start up a business. The firm was founded in September 2021 and began
operations in April of this year. It is a Mumbai based organization.

In early 2020, when pandemic hit the world it had a massive impact on the world businesses.
Many traditional businesses shut down due to pandemic, whereas E-commerce businesses had
a benefit at that time. Their business model was mostly unaffected due to covid restrictions so
the company managed to supply all the necessary products to its customers. So, the sales
boosted due to the situation and they acquired many new customers. Since then the business
of e-commerce is at the boom phase.
In the current situation, the new section of e-commerce is seeing great increase in demand, so
all the main players in e-commerce are jumping into quick commerce. Big basket is coming up
with BBNow, Swiggy is coming up with Swiggy instamart and many big players are in queue.
Zepto is close to unicorn status as the venture has raised USD 200 million in its series D
fundraise, valuing the company at around USD 900 million. In a recent interview, the founders
mentioned that maximum of the fund would be utilized to expand into new areas currently the
said company is only working in tier one cities.
Business Model of Zepto

Zepto use a hub & spoke model like maximum other companies. It generally has warehouse(s)
at outskirts of the city. All vendors supply the goods at this warehouse. From the warehouse
the goods are supplied to different dark stores located in several parts of the city. The Stock
Transfer Order (STO) comes from head office in Mumbai and accordingly the goods get
delivered to the dark stores. STO generally takes place on a daily basis but the volume of the
STO varies depending upon location of dark stores and demand.
Zepto do not use local stores unlike Blink it (Formerly Goffer’s), which company faced many
issues in delivering from local stores on commission basis.
Zepto in Kolkata

Zepto in Kolkata has very limited reach area wise compared to other metropolitan cities.

Zepto in Kolkata cover only 5 major areas covered by 8 dark stores, which is far lesser if it is
compared to other major cities India.
Zepto’s business with ITC in Kolkata
Zepto have started business with ITC Ltd from February 2022 and till end of April 2022
approximately business worth Rs. 30 lacs have been managed. Out of the entire sales volume
Cigarettes have a massive share of above 50%. While the rest of sales have come from food and
personal caring products.

Sales Contribution

34%

52%

14%

Food PCP Cigarette

Warehouse of Zepto, Dhulagrh, West Bengal

Date of Commencement of business from the warehouse – 21-01-2022
Warehouse area - 14000 square feet
Warehouse team – 60-65 employees
Loading & Unloading dock - 4
*** The entire team of warehouse is hired from a third party, they are not employees of the
company. There are only 5 employees of Zepto in the warehouse, who are mainly supervisors.

Warehouse team

In-bound team Out-bound team Inventory team

 In-bound team – This team looks after all the goods that is received from different
vendors as per the invoice. They look into very single details of the goods that is
received such as batch number, freshness, quantity, MRP etc.
If the in-bound team finds any discrepancy in the goods received they immediately
inform the supervisors. The role of the inbound team ends when the goods are received
at GRN desk.
 Out-bound team – The role of this team is to check and load all the goods from the GRN
desk to the truck, which will dispatch the goods to the dark stores in different areas.
They look into every details of the goods that is to be dispatched such as batch number,
MRP, quantity etc.
The role of the out-bound team starts from GRN desk to the truck, in which the goods
are loaded.
 Inventory team- Inventory team checks all the stock that is received at the GRN desk.
This team matches all the stock physically in the warehouse with the stock as per their
system. This checking is done hourly basis and all the fast-moving stocks are checked
even in lesser frequency.
Apart from this the supervisors randomly check any stock any time. In case of any
mismatching, the entire area of the warehouse is under the CCTV surveillance. There are
more than 60 CCTV cameras in the area. On an average each camera monitors 200
square feet area and the footage is held for more than 120 hours.
Due to the strict inventory management the inventory accuracy is 99.87%, which is the
highest in any of their warehouses across the nation.

Apart from the above mentioned 3 teams there is one more team that is the Security team,
which doesn’t allow any trespasser without checking and anything that can be there in the
entire warehouse (Not only Zepto but Phone Pay, Ifko etc.) such as phones, laptops, pens not
allowed inside the warehouse.
Vehicles
There are 12 vehicles of Zepto till date, which are mainly of two types one is Tata Ace and other
one is Tata 407. The vehicle size is kept relatively small keeping the location of the dark stores
in mind. The dark stores are mainly situated at areas which are very congested, so vehicle of
higher capacity in loading may cause some issues in the traffic.
Although the transportation rate is different depending upon the weight of the product but on
an average Rs. 3/- per unit is considered as far as transporting to the dark stores from
warehouse is concerned. In many cases clubbing of goods of multiple dark stores can be seen as
STO orders are not always occupy the entire capacity of a vehicle.
Stock keeping technique-
The entire stock in moved in FIFO (First In First Out) basis to keep the freshness of the goods
high and lesser chances of goods getting damaged.

 All the fast-moving goods, heavy goods are kept near the unloading dock and mainly in
the lower racks.
 All the glass items such as bottles of sauce, jam etc. are kept in relatively lower racks.
 Cigarettes, matches are kept in the middle racks to minimize the chances of getting wet.
 All the products are kept category wise like all the noodles are kept in a particular aisle.
Overall all the stocks are kept in three types-
1. Cage/Drawer type
2. Front type
3. Bin type
Apart from these 3 types all the products which are in full CFC are kept either at the top (Less
weight CFC) or at the bottom (High weight CFC).
Vendors
The warehouse deals with multiple vendors while the maximum business is done with HUL,
P&G, ITC, Nestle etc. companies. Recently Emami Aggrotech has started business, which is also
giving good business. All the vendors come on appointed date and time.
Maximum of the companies deliver the goods within 2 days of Purchase Order (PO) generation.
Dark stores-
Currently Zepto has 8 dark stores situated in Kolkata.

 Bhawanipur
 Rajarhat
 Newtown
  Phoolbagan
 Behala
 Lake town
 Salt Lake
 Jadavpur
Bhawanipur has the highest sales in compared to other dark stores. The average daily Stock
Transfer Order (STO) of the Bhawanipur dark store ranges between Rs. 1lac to Rs. 1.20 lacs.
Whereas in other stores it ranges between Rs. 60000 – Rs. 75000.
The STO is generated from the headquarter of Zepto situated Mumbai. From the headquarter
the STO is directly sent to different warehouses, then the warehouses deliver the goods
accordingly. Normally the delivery is done within 24hours of the STO received.
The location of the dark store plays a huge role in keeping the promise of delivery within 10
minutes. Hub and Spoke model is used while considering the location of Dark stores. Dark store
covers a radius of 3 kilometers. Till date the average time of delivery time is 9.67 mins in
Kolkata whereas competitors such as Swiggy instamart, Blink it have an average delivery time of
16-18 minutes.
10-14 additional dark stores are planned from July 2022 onwards in several parts of Kolkata. As
the delivery is within 10 minutes the maximum orders from customers are impulse purchases.
So, no forecasting works in this situation.