Introduction: A Leader in Quick Commerce
Zepto Cafe, the trailblazing 10-minute food delivery arm of Mumbai-based quick-commerce unicorn Zepto, has redefined urban convenience, achieving over 100,000 daily orders, as announced by CEO Aadit Palicha. Launched in December 2024, the service has captivated consumers with its rapid delivery of snacks and beverages. However, recent supply chain and staffing challenges have prompted a strategic scale-back in select operations. Far from a setback, this move highlights Zepto’s focus on sustainable growth and profitability, positioning Zepto Cafe to strengthen its leadership in India’s competitive quick-commerce landscape as it tackles operational hurdles with agility and foresight.
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A Milestone Achievement: Explosive Growth
Zepto Cafe has seen phenomenal success since its inception, surpassing 100,000 daily orders by early 2025 and potentially reaching 200,000 by May, per industry estimates. Operating from mini-kitchens in 750 of Zepto’s 900 dark stores, the service delivers high-margin items like coffee, puffs, and pizzas within 10 minutes, achieving a $100 million annualized GMV run-rate and 50% gross margins, according to Palicha. This growth has positioned Zepto Cafe as a formidable competitor to local cafes and food delivery giants like Zomato and Swiggy, capitalizing on India’s demand for ultra-fast convenience.
Strategic Optimization: Addressing Challenges
To maintain quality amid soaring demand, Zepto Cafe temporarily paused operations in 44 North Indian cafes in April 2025, including in Delhi NCR, Chandigarh, and Amritsar, due to supply chain constraints and staffing shortages, as reported by The Economic Times.
Supply Chain Resilience
The surge in orders strained Zepto’s supply chain, with vendors struggling to supply 200 products across cities. Some reported unfulfilled orders, with one supplier noting a drop in monthly order values from ₹1.5 crore to ₹40 lakh. Zepto is now forging new vendor partnerships and pausing certain menu items to streamline operations, aiming to resume full operations by September 2025 with a more robust supply chain.
Workforce Management
Staffing challenges have also impacted Zepto Cafe, with each cafe requiring 9-10 workers, reduced to 7-8 to cut payroll costs of ₹95 crore for 3,000 employees in April 2025. The closure of 44 cafes affected over 700 gig workers, though most were reassigned to other roles. Zepto is investing in training and automation to enhance efficiency, addressing the departure of some workers who declined relocation.
Cost Control: A Path to Profitability
Zepto’s scale-back aligns with efforts to curb cash burn, critical for its planned IPO. Monthly expenditure dropped from ₹250-300 crore to ₹95 crore by April 2025, per reports. Dark store handling costs fell 9% to under ₹10 per order, and EBITDA margins improved by 20% from January to May 2025, per Palicha. Zepto has also slowed new dark store launches, focusing on optimizing its 900-store network, with most expected to achieve EBITDA positivity soon.
Competitive Landscape: Standing Strong
Zepto Cafe faces intense competition from Blinkit’s Bistro and Swiggy’s Bolt, operating in over 100 and 500 cities, respectively. Regulatory scrutiny from bodies like AICPDF and NRAI over FDI norms and processed food concerns adds pressure. Yet, Zepto Cafe’s in-house kitchen model ensures quality and speed, giving it an edge. Addressing operational challenges will be key to maintaining market share.
Financial Strength: Defying Doubts
Refuting claims of high cash burn, Palicha highlighted Zepto’s ₹2,400 crore GOV in May 2025, up from ₹750 crore the prior year. Zepto is in talks to raise $500 million from investors like General Catalyst, supporting dark store expansion and tech upgrades to bolster Zepto Cafe’s operations.
Labor Dynamics: Supporting Gig Workers
A May 2025 strike in Hyderabad over reduced delivery fees highlighted labor challenges. Zepto is engaging with workers and the TGPWU to address concerns, ensuring fair treatment to maintain operational continuity.
Future Outlook: A Bright Horizon
Zepto Cafe’s strategic pivot is set to drive a robust comeback by September 2025, targeting 300,000 daily orders within a year. With a focus on profitability and efficiency, Zepto Cafe is poised to redefine quick-commerce food delivery, cementing its role as a consumer favorite.
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Last Updated on Wednesday, July 16, 2025 4:32 pm by Siddhant Jain
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