Zepto: Pioneering Platform Fees in Quick Commerce

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Summary –

  • Zepto introduces a platform fee of Rs 2 per order for certain users, a first in quick-commerce.
  • Shifts away from free deliveries, now charging Rs 5 to Rs 28 based on cart value.
  • Implements a late-night handling fee of Rs 15 for orders after 11 pm.
  • Focuses on core efficiency and introduces the Zepto Pass for balance between fees and operational excellence.
  • Open to adjusting fees in the future to optimise demand and profitability.

In a groundbreaking move, Zepto, the hyperlocal delivery player, has become the first quick-commerce company to introduce a platform fee. This fee, amounting to Rs 2 per order, applies to a select group of users. Let’s delve into the details of this significant development.

The Platform Fee Unveiled

Zepto’s decision to levy a platform fee marks a shift in the quick-commerce landscape. While competitors like Zomato-owned Blinkit and Swiggy Instamart currently do not charge a fee on grocery orders, Zepto is boldly venturing into uncharted territory. The Rs 2 platform fee aims to enhance the company’s revenue model and contribute to its long-term sustainability.

Farewell to Free Deliveries

In addition to the platform fee, Zepto has bid adieu to free deliveries for specific users. Previously, orders above Rs 99 or Rs 199 (depending on transaction frequency) enjoyed free delivery. However, Zepto now charges anywhere between Rs 5 and Rs 28 as a delivery fee, based on the cart value. This strategic move aligns with Zepto’s goal of achieving EBITDA profitability by May 2024.

Late Night Handling Fee

Zepto’s commitment to profitability extends beyond delivery charges. For orders placed after 11 pm, the company collects a ‘late night handling fee’ of Rs 15. This fee ensures that Zepto optimises its operations while serving night owls.

Zepto’s Vision

Unlike some competitors that rely heavily on delivery fees, Zepto emphasises core operating efficiency and cost reduction. The recently introduced Zepto Pass exemplifies this approach. By striking a balance between fees and operational excellence, Zepto aims to revolutionise quick-commerce.

The Road Ahead

As Zepto pioneers the platform fee, speculation arises about potential fee adjustments in the future. While the current fee is modest, the company may explore higher charges to capitalise on demand surges during peak times. Regardless, Zepto’s commitment to profitability remains unwavering.

In summary, Zepto’s platform fee is a bold step toward sustainable growth. As the quick-commerce landscape evolves, Zepto’s innovative approach sets the stage for a dynamic industry.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory. 

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