India's Zepto becomes the first quick commerce unicorn to introduce platform fee of Rs 2

In a strategic move to enhance profitability, Zepto, India's quick commerce startup, has introduced a platform fee of Rs 2 per order. 

Additionally, the company has ended free deliveries for select users and now charges delivery fees ranging from Rs 5 to Rs 28, depending on the order value.

These fees are in addition to a variety of other charges, including handling fees that range between Rs 5 and Rs 20, a surge fee, and a "cart fee" for orders below Rs 100. This initiative signifies Zepto's effort to diversify its revenue streams beyond just delivery fees, aiming for core operating efficiency and cost reduction.

Comparison with competitors

Unlike its competitors, Zomato-owned Blinkit and Swiggy Instamart, which only impose handling fees, Zepto has ventured into platform fees, a territory more common in these companies' food delivery sectors. The move is seen as an attempt to emulate the revenue models of its rivals while striving for EBITDA profitability by 2024.

Zepto Pass: A membership program

Parallel to the platform fee, Zepto recently launched a membership program named Zepto Pass, priced between Rs 99 to Rs 299 per month, offering unlimited free deliveries on orders above Rs 99.

The startup has made this programme available at a discounted rate of Rs 19 and has quickly attracted 1 million subscribers.

Focused on achieving profitability 

Zepto witnessed a significant 14-fold growth in its revenue, reaching Rs 2,024 crore in FY23, up from Rs 142.36 crore in FY22. However, this growth also came with a surge in losses, which increased more than three-fold, from Rs 390 crore in FY22 to Rs 1,272 crore in FY23. 

Despite tripling its losses, It plans to achieve EBITDA profitability and reduce monthly cash burn. Interestingly, the company is also considering moving its base back to India and listing on the Indian bourses by 2026.