Zepto's dark store expansion to support non-grocery delivery
What's the story
Quick-commerce company Zepto is planning to expand its dark store network to accommodate a larger assortment of products, according to a Mint report.
The move is part of the online grocery platform's strategy to delve deeper into non-grocery delivery.
The four-year-old startup, which has attracted significant investor interest, plans to establish one or two large storage facilities in major cities over the coming months.
Product expansion
New facilities to serve as hubs for high-value items
These new facilities will function as hubs for the delivery of high-value items such as electronics, appliances, gifting items, and luxury goods like gaming consoles.
While Zepto currently offers some of these categories in a few cities, the larger stores will enable the storage of more stock-keeping units, which is not possible in smaller grocery-focused stores.
The company also plans to use these larger stores to replenish goods in smaller dark stores located within a 2km radius in most major cities.
Market strategy
Zepto's strategy shift toward non-grocery delivery
"Zepto is slowly adopting Swiggy Mall's and Blinkit's model of maintaining specific stores for non-grocery items and a greater number of small stores for fast-moving goods," one source told Mint.
"While Zepto is making strides in ramping up e-commerce sales, its focus will remain on quick commerce."
The company had considered creating a separate tab in its smartphone application for e-commerce orders, similar to Swiggy's Mall feature but decided against this idea to maintain its commitment to 10-minute grocery orders.
Market trend
Quick commerce firms eye non-grocery items for higher revenues
Quick commerce firms are increasingly focusing on non-grocery items due to their large ticket sizes that help boost order values and volume.
Consumer brands are also benefiting from this strategy with quick commerce platforms becoming a key sales channel for many.
For instance, Honasa Consumer reported last month that sales through quick commerce are outpacing traditional e-commerce platforms.
Funding
Zepto's funding journey and future plans
Zepto, founded in 2021 by Aadit Palicha and Kaivalya Vohra, quickly gained prominence after securing over $150 million in funding from notable investors such as Y Combinator and Nexus Venture Partners within months of its inception.
The company achieved unicorn status last year after raising $200 million in Series E funding led by US private equity investor StepStone Group.
Zepto is now looking to raise approximately $650 million at $3.5 billion valuation.