Zepto, a quick commerce company, revealed the introduction of a subscription plan offering customers unlimited free delivery and potential discounts of up to 20% on grocery purchases. Named Zepto Pass, the program is priced between Rs 19 to Rs 39 monthly for most customers, according to the Mumbai-based firm.
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GLOOn Thursday, Zepto, a quick commerce company, revealed the introduction of a subscription plan offering customers unlimited free delivery and potential discounts of up to 20% on grocery purchases. Named Zepto Pass, the program is priced between Rs 19 to Rs 39 monthly for most customers, according to the Mumbai-based firm. Following a one-month trial period, Zepto observed that customers who enrolled in the loyalty program spent over 30% more on the app, with a subsequent 10% increase in monthly retention. During the trial phase, the program experienced significant uptake, with nearly half of all orders originating from Zepto Pass subscribers within just two weeks.
Aadit Palicha, co-founder and CEO of Zepto, informed Business Standard, “We’ve witnessed a significant increase in shopping frequency due to the program. Zepto Pass members are diversifying their purchases across various categories. We anticipate surpassing one million Zepto Pass users within the initial month.” The program utilizes customer purchase data and average spending habits to tailor personalized incentives. Palicha explained, “For instance, if a customer typically spends Rs 500 per order, they may receive additional discounts once they surpass that threshold.” Zepto becomes the second quick commerce company, following Swiggy Instamart, to introduce subscription benefits. However, unlike its Bengaluru counterpart, Zepto’s subscription perks extend to its food delivery service as well.
Zepto’s approach of launching its membership program at an initial cost of Rs 19 might be effective in capturing a larger portion of the market compared to its competitors. Prosus, Swiggy’s primary investor, disclosed that Instamart’s losses decreased by up to 75% during the first half of calendar year 2023 as it prioritized expansion and enhancing profitability.
At a time when quick commerce firms are striving for profitability, Zepto is making strides in this direction. Aadit Palicha stated, “Despite providing compelling value to customers through Zepto Pass, we remain on course to achieve near-profit after tax (PAT) positivity within two quarters. Our focus on enhancing profitability primarily stems from optimizing costs through efficient supply chain management, allowing us to consistently deliver value to customers.” In the financial year 2022-23 (FY23), Zepto’s operational revenue surged 14 times to Rs 2,024 crore compared to Rs 140.7 crore in the previous year. However, the Mumbai-based startup’s losses expanded threefold to Rs 1,272 crore for the period, up from Rs 390.3 crore a year ago, according to filings with the Ministry of Corporate Affairs.
“We’re also focused on broadening our product range,” stated Palicha, indicating the company’s efforts to introduce a more extensive selection of items to its platform. In August of the previous year, Zepto secured $200 million in a series E funding round, achieving a valuation of $1.4 billion and attaining unicorn status after a prolonged period without significant funding. The funding round was spearheaded by the StepStone Group, an institutional asset manager based in Baltimore, which also serves as a Limited Partner (LP) of Zepto’s existing investor, Nexus Venture Partners.
Source: Business Standard India
