The future of Zepto: Aadit Palicha’s five bold statements

Unit economics seems to be working as 2024 is the year when the top-3 players expect to turn EBITDA profitable. Their ambitions are also finding a new swag, one that isn’t restricted to grocery anymore.

They are setting up camp in e-commerce territory with electronics, home appliances, fashion, lifestyle, cosmetics and more. Flipkart has taken notice and confirmed plans to take yet another crack at quick commerce by mid-2024. The Walmart-backed e-commerce giant had scaled down Flipkart Quick in November 2022, calling its 90-minutes delivery model unsustainable.

E-commerce is now going hyper as hyper goes supersonic. Zepto's co-founder Aadit Palicha has made the boldest statement yet. In a LinkedIn post, he wrote, "2024 will be the year people realise that quick commerce represents another Amazon/Flipkart level outcome in Internet India."

In a chat with Shereen Bhan on CNBC-TV18’s Young Turks, Palicha made five more bold statements, envisioning the future of his 3-year-old hyper-active startup and that of the quick commerce industry.

“We have had the conviction since Day-1. We have been telling people. People are now slowly starting to realise. Why are people realising it? We are in a position where Zepto is going to go from zero to $1.5 billion sales or GMV and turn EBITDA positive within 36 months of launch. We are going to be the fastest consumer company (to hit the milestone). There is no better return-on-equity story that has existed in internet India."

“Once people experience quick commerce, there is no going back. They get addicted to that buying flow. We have 20 lakh people who open the app everyday. We are the fastest quick commerce player in the country and so is quick commerce as a category. We are not growing in percentages, we are growing in multiple. After clocking 150 percent growth over FY23 and FY24, we expect to grow at 100 percent in FY25 as well.”

“If you look at the categories that are growing rapidly on Zepto today, you will see categories like toys, beauty, cosmetics and low-ticket jewellery like rings and bangles that sell especially well during event periods. Fast moving apparel like Jockey and appliances like hairdryers, switches, faucets..."

“Zepto’s meat and seafood private label brand—Relish—has become a ₹150 crore brand within four months of launch. It is growing 20-30 per month. We think in 12-15 months, it can become a ₹1,000 cr brand. It's not beauty and cosmetics and apparel, there are these other big-ticket opportunities where we can consolidate and become a horizontal e-commerce player. Positively surprised by the demand and all new categories are incremental to profitability with higher margin than baseline FMCG.”

“We are only 5x away from DMart's scale which is a $30 billion company. We are growing 2-3x every year. DMart is growing ~15% year-on-year adjusted for inflation. We could be a DMart scale company in 2-3 years. That's an opportunity we want to focus on.”

“There is a good amount of growth on the table right now. Long story short, we would be excited to tap public markets, raise capital and deploy that capital for a high Total addressable market (TAM) grocery outcome, I think public markets might be excited about that. We are currently tracking 18-24 months on building out the infrastructure we need to go public.”