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Zepto’s Projected Exponential Growth in 2024

Zepto
Preeti Bali / 6:36 am / July 8, 2024

Zepto, a major player in the quick commerce sector, is set to experience substantial growth, with CEO Aadit Palicha forecasting revenues to reach Rs 2.5 lakh crore within the next 5-10 years, contingent on successful strategy execution. During his speech at the 7th JIIF Foundation Day, Palicha highlighted the critical importance of groceries and household essentials in achieving this ambitious target.

 

Dominance of Grocery and Household Essentials

Palicha emphasized that the grocery sector surpasses all other categories combined on platforms like Amazon and Flipkart. He noted, “Even if you combine electronics, apparel, and furniture and then double it, it still wouldn’t match the scale of groceries and household essentials.” This underscores the vast potential within this market segment.

 

Market Dynamics and Growth Projections

Discussing current market trends, Palicha revealed that India’s grocery and household essentials market reached $650 billion in FY23. He projected this market to grow at a 9% CAGR, potentially hitting $850 billion by FY29.

 

Zepto’s Impressive Growth and Future Plans

Zepto has already shown remarkable growth, with revenue jumping from approximately Rs 2,000 crore in FY23 to over Rs 10,000 crore in FY24. The company recently secured $665 million in funding, boosting its valuation to $3.6 billion, nearly three times higher than the previous year, and setting the stage for an upcoming public listing.

 

Challenges and Workforce Development

Palicha acknowledged that the primary challenge for the company is recruiting individuals with the right mindset. He emphasized the crucial role of a skilled workforce in sustaining growth. Zepto aims to double its warehouse network to over 700 by March 2025, funded by reinvesting sales from established stores.

 

Market Share and Profitability

Currently, Zepto holds a 29% market share in the quick commerce sector, specifically in 10-minute grocery delivery. The company is focused on increasing market penetration, driven by its growing profitability. Palicha noted that 75% of their stores have reached profitability, indicating a strong financial foundation for further expansion.

 

Strategic Investments and Market Positioning

With substantial investments from major entities like Avenir Growth Capital, Lightspeed, and Avra Capital, along with continued backing from existing investors such as Glade Brook and Nexus, Zepto is strategically positioned to capitalize on India’s expanding quick commerce market.

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