In the face of supply chain problems and a lack of qualified kitchen personnel, Zepto Cafe, the 10-minute meal delivery subsidiary of fast commerce company Zepto, is reducing operations. The delay coincides with rivals Swiggy’s Snacc and Blinkit’s Bistro expanding their presence in important urban markets.
The four-year-old startup’s attempts to manage its financial burn are causing Zepto Cafe’s growth and expansion to slow down, according to various media reports. As reported, Zepto has also delayed the opening of its “dark stores,” which are essentially miniature warehouses.
Zepto Café Witnessing Decline in Daily Orders
According to media reports, Zepto Cafe’s daily orders decreased dramatically in June when compared to the early months of the year. Of the almost 1,000 locations where Zepto offered 10-minute food delivery, 44 stopped their cafe services in May.
According to a media report that cited a source, typical daily orders used to peak at about 120,000–130,000 but decreased to 65,000–67,000. Operations have been impacted by a number of factors related to staffing and sourcing. In a LinkedIn post on February 22, creator and CEO Aadit Palicha stated that Zepto Cafe’s daily order volume had reached 100,000.
In response to a media question, a Zepto representative refuted the allegations and stated that the company’s yearly net sales of INR 1,000 crore had increased by 700% year over year and by more than 15% month over month. The business is still putting a lot of effort into it and anticipates significant growth this year.
However, industry executives also noted that the Zepto Cafe app’s downloads have decreased over the last three to four months, falling from 1.5 million downloads in December 2024 to only 17,000 in June. However, according to various media reports, the main Zepto app accounts for over 90% of Zepto Cafe’s revenue, with the standalone app driving only a small portion of it.
Blinkit and Swiggy Slowing Down their Acquisitions
Zepto has been working to grow their market share, but Blinkit and Swiggy have also slowed the opening of new dark shopfronts. Brokerages and industry analysts estimate that Swiggy’s Instamart and Eternal’s Blinkit increased their market share in the rapid commerce space overall during the April–June quarter.
According to a media report, Blinkit and Instamart are expected to have scaled back their dark store expansion to roughly 250 and 80 new locations in the first quarter of FY26, from 294 and 316 stores, respectively, added in the preceding three months.
Zepto released a stand-alone app for 10-minute food delivery in December 2024. At that time, it was processing 30,000 orders every day and opening over 100 cafe locations each month.
In an effort to raise $500 million, Zepto has held conversations with its current shareholders, General Catalyst and Avenir Growth, amid the slowdown in its food delivery sector and the general cooling of its rapid commerce operations. The company hopes to have an IPO by the end of the year, and the funding is a step towards that goal.
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