How is the 10 minutes delivery system giving huge competition to other big companies?
Now the question arises how it is possible to deliver groceries within 10 minutes and if it is even possible then what will be the impact of this in India? In this blog, we will tell you how 19-year old students’ brains turned into a thread for big multinational companies.
What is the 10-minute delivery system and how is it possible?
It is a system in which one can receive the delivery of its grocery items within 10 minutes of their order.
According to some companies, some apps are giving customers 10-minute door-step deliveries to provide an easy and convenient experience for customers.
A company named Zepto, whose name plays on a mathematical term, offers 10-minute grocery deliveries, a category that has been on fire in several regions around the world recently.
Zepto made 10-minute delivery possible, through the Dark store model.
Number of grocery delivery system companies
In 2020, 19-year-old Stanford dropouts Aadit Palicha and Kaivalya Vohra founded Zepto, a Mumbai-based grocery delivery startup that offers essential goods in 10 minutes.
Initially delivering groceries in Bangalore, Mumbai, and Delhi, the market has expanded, and the app is now available in Delhi, Chennai, Gurgaon, Bangalore, Mumbai, Hyderabad, Pune, and Noida. The app is also scheduled to launch in Kolkata soon.
Blinkit (earlier known as Grofers)
Based in Gurgaon, the Zomato-backed Blinkit delivers groceries, essentials, and other products within 10 minutes. It was founded by Albinder Dhindsa, the big competitor of Zepto.
With Swiggy’s Instamart, you can order groceries, essentials, and other products which usually take about 15 minutes to 30 minutes to deliver. Unlike Zepto and Blinkit, Swiggy doesn’t deliver the essentials in 10 minutes, it takes Swiggy 15 to 30 minutes to deliver them.
Who came up with this 10 minute delivery system and how did they get this idea?
The two Stanford dropouts Aadit Palicha and Kaivalya Vohra came up with this idea for a 10 minutes delivery system.Pepto also arrived at the scene by chance; Aadit Palicha and Kaivalya Vohra had been in India for a few days before the pandemic enveloping India hit.The teenagers, who had previously worked together on projects including a ride-hailing app for school kids, found themselves trapped inside their buildings in Mumbai during the pandemic.
Even though the local government still permitted grocery deliveries, the two struggled to get their supplies.And this frustration gave birth to “Kirana Kart ”, their model was simple, because most of the people were locked in their house during Covid and were unable to go out so Kirana Kart came up with a strategy to deliver the groceries home to home.
While running Kirana Kart a pattern was observed and they saw that whichever delivery is completed within 45 minutes to 1 hour, repeat order of those customers is placed 20% of the time and the deliveries completed in 20-30 minutes, then repeat order of those customers is placed 40-50% times.
By regularly studying these patterns, Aadit and Kaivalya discovered a lot of things about Indian consumer behaviour and after that, they shut down Kirana Kart and started with Zepto And that is how they came up with the idea of this startup which turned out to be a trendsetter.
How did 19-year old students’ brains turn out to be a threat to the various big delivery system companies?
With its unique strategies, Zepto has undoubtedly beaten all billion-dollar companies.Those three strategies were:- Firstly they identified consumer behaviour I.e. the answer of 3 Ws’, what do consumers want, what will they pay for it and what is available in the market.
Consumers want quick delivery and heavy discounts. Consumers pay for convenience In the market, there are many groceries delivery companies are available that are, Grofers, Dunzo, Big basket, Swiggy Instamart & othersBut all these companies were unable to fulfil the demands of consumers within a limited period, so Zepto came up with an amazing idea that changed the whole scenario.
Customers were impatient but due to a lack of options in the market, they weren’t able to do anything. Zepto monetized this impatience of people through its 10-minute delivery value proposition. The second strategy of Zepto was ‘the dark store model’, as whichever area Zepto enters into, these three things are done firstly in those areas.
- Whichever area Zepto enters first buying patterns of that area is analyzed.
- What’s the purchase frequency of people & how frequently they purchase those things
- What’s their total spending power and how much money they can spend in total? Zepto whenever enters into the new area then they analyze traffic routes of that area.
After that, they analyze real estate prices of that area and what will be their average lead time if they deliver here And at last, they open a dark store in a centralized location.Dark stores are mainly small warehouses, whose capacity is to serve all consumers within a radius of 3 kms All these strategies used by Zepto gave a huge competition to its competitors.As consumers were able to get the groceries within 10 minutes so they started switching to Zepto.
Which company also started delivering groceries within 10 minutes?
Grofers on Tuesday announced it has begun 10-minute grocery delivery in 10 cities, including Delhi, Mumbai, Bengaluru, and Jaipur.: “Today, we launched our 10th city with the promise of delivering groceries within minutes to your doorstep. Although our delivery times are still hovering around the 15-minute mark, our ultimate vision is to have every customer getting groceries under 10 minutes,” Grofers said.
What is the impact of the 10 minute delivery system?
Most riders are still panicked about not making these short delivery windows after a late order has arrived. What follows is typically a temper tantrum: The customer repeatedly calls the delivery person and/or yells at them once the order arrives.
Moreover, the companies penalize their delivery workers, too. If riders don’t arrive within the window, some platforms will block their IDs and slash incentives, explains Shaik Salauddin, general secretary of the Internet Federation of App-Based Transport Workers. Incentives are monetary rewards for delivery workers over and above a nominal fee that is based on the number of deliveries, the number of rejects, and the number of hours worked. However, that’s only going to get worse as we deal with Company.
Will Zepto continue to be in profit?
Zepto reports a 65% month-over-month buyer retention rate and a network of micro-warehouses, which are each capable of processing over 2,500 orders a day.
Currently, Zepto is available in Bangalore, Delhi, Gurgaon, Chennai, and Hyderabad; plans to launch in Pune and Kolkata in the near future. In order to ensure fast delivery, it has set up more than 100 dark stores in these cities that it says are optimized for fast delivery.
Palicha noted that “we have grown our business by 10 times in one and a half months and are currently working on growing it by another 10 times by February or March.”The startup has been able to attract a large number of high-profile employees from companies like Flipkart, Amazon, Uber, Dream 11 and Pharmeasy in recent months.
Zepto’s aggressive growth, disciplined execution, and ambitions have made the startup appealing to people of similar tastes, according to Palicha. But Zepto’s aggressive growth and disciplined execution have also contributed to its success, he said. “We have been able to walk the walk,” he said.
Y Combinator partner Anu Hariharan, a partner at Zepto, said in a statement, “I’m excited to lead this round in Zepto (YC W21). We’ve noticed that Aadit and Kaivalya are exceptional founders, bringing relentless focus and “Doordash-like” execution to the quick commerce model.
Their customer experience on the logistics front is unparalleled and this has enabled them to scale to most major metro areas in just 5 months. We are confident Zepto will remain the top player in this space for the long term.” Said Kaivalya.
What will be the future of India with a 10-minute delivery system?
As India is a widespread market where consumers are impatient and want their order on time, with the 10-minute delivery system the needs of the consumers will be satisfied to the soonest. But the problem arises when they have to face the consequences, like traffic or other reasons due to which the order gets late and if talking about the future of 10 minutes system, the companies will have to complete the demands of consumers within the period to survive in the market. With the fastest delivery system, people will generally shift to the online marketing route and which in turn will be in favour of these companies.
What is Zepto?
As it expanded into new cities, Zepto, a Mumbai-based startup operating a 10-minute instant grocery delivery service, has nearly doubled its valuation to $570 million from $225 million less than two months ago
What are the strategies used by Zepto to gain customers?
Zepto came up with an amazing idea that changed the whole scenario. Customers were impatient but due to a lack of options in the market, they weren’t able to do anything. Zepto monetized this impatience of people through its 10-minute delivery value proposition. The second strategy of Zepto was ‘the dark store model’, as whichever area Zepto enters into, these three things are done firstly in those areas.
1. Whichever area Zepto enters first buying patterns of that area is analyzed.
2. What’s the purchase frequency of people & how frequently they purchase those things.
Who is the founder of Zepto?
Kaivalya Vohra, CTO, Zepto and Aadit Palicha, CEO and Co-founder, Zepto
Who funded Zepto?
With its first institutional round of $60 million, the online grocery delivery business turned heads both for raising such a large sum and also for being founded by two 19-year-old Stanford dropouts. Glade Brook Capital led this round of funding.