For Blinkit, Zepto and Swiggy Instamart, much of the post-pandemic era was spent persuading urban Indians to prioritise convenience over value, with groceries delivered in minutes serving as their biggest differentiator. Six years on, the obsession with ultra-fast, 10-minute deliveries appears to be fading.
A closer look at Zepto’s Updated Draft Red Herring Prospectus, filed with SEBI on June 8, makes it clear that the industry is fundamentally changing.
Companies are prioritising density, advertising yield and retention rates over cash burn, dark store count and ultra-fast delivery time. Zepto’s IPO pitch is also centred around a similar trend — volume leadership; advertising revenue to fund the path to profitability and customer retention rather than chasing new ones.
Despite the changing priorities, one thing remains constant: cash is king.
Zepto’s cash position, as reported in its own filing, stood at approximately ₹5,680 Cr at the close of FY26. Eternal held ₹17,972 Cr in cash reserves as of FY26, while Swiggy’s stood at ₹15,053 Cr.
Now, Zepto is raising ₹8,010 Cr via a fresh issue to close this gap. But can it convince public market investors that operational efficiency is enough? Let’s find out…
Zepto’s Walmart Playbook
According to Zepto’s draft IPO papers, the delivery behemoth is now focused on every day low prices, or EDLP, playbook. Retail giant Walmart operates on the same strategy by focusing on consistently low, stable prices year-round instead of relying on frequent sales or temporary discounts.
This simply means that Zepto may not be going after bigger basket sizes or average order values. It is rather trying to chase more order volumes by reducing the cost per order and chasing value-conscious shoppers.
To achieve this, Zepto has focused on building dark stores in high-demand neighbourhoods. This has reduced the average delivery distance for its partners.
This results in a snowfall effect, which rolls something like this:
When average delivery distances shrink, the cost of fulfilling each order falls, while riders are able to complete more deliveries every hour.
Lower fulfilment costs give platforms room to reduce fees or absorb promotional spending without increasing cash burn.
Lower fees drive more order volume. More order volume justifies opening more dark stores in that neighbourhood. And the cycle compounds.
As of now, Zepto claims to be the fastest-growing quick commerce platform in India. Its order volumes are said to be outpacing industry growth, growing at a 119.4% CAGR from FY24 to FY26.
As of March 2026, Zepto operated 1,139 dark stores, almost on par with Swiggy Instamart’s 1,143 stores. Blinkit was operating 2,243 active stores as of March 2026. Zepto reported 23.3 Lakh orders per day compared to Swiggy Instamart’s 1.25 Lakh orders, whereas this number for Blinkit stood at 30.4 Lakh orders.
Zepto has also surpassed Swiggy Instamart in revenue scale. Zepto’s revenue from operations for FY26 stood at ₹22,624 Cr, while Swiggy Instamart reported a top line of ₹3,859 Cr. Blinkit remained the market leader with a top line of ₹37,779 Cr.
Notably, both Zepto and Blinkit have transformed into an inventory-led business model. With this, they are now booking the full value of goods sold on the platforms. Instamart, on the other hand, is a marketplace model and recognises only commissions and platform fees as revenues.
The challenge buried beneath all of this is the average order value question.
The document does not explicitly disclose Zepto’s AOV. Competitors and analysts have persistently placed it ₹100–150 below the industry standard, which Blinkit pegs at around ₹665–669 per order based on Eternal’s own quarterly filings.
Swiggy Instamart leads when it comes to AOV metric with the last reported as ₹ 700 as of Q4,FY26.
However Zepto’s EDLP model is designed to win on frequency rather than ticket size, but one that requires substantially higher order volumes to generate comparable topline.
The UDRHP’s implied AOV, derived from its own NRV and order count disclosures, comes to roughly ₹387 per order in Q4 FY26 not as low as critics suggest, but meaningfully below Blinkit’s and Instamart’s profile.
On the profitability front, too, Zepto is making progress. Its adjusted EBITDA loss per order narrowed from ₹142.68 in Q4 FY25 to ₹59.40 in Q4 FY26. However, Blinkit remains the benchmark, becoming the first major quick commerce player to report positive adjusted EBITDA per order in Q4 FY26. For now, that is the profitability trajectory both Zepto and Instamart are trying to replicate.
The Ad Engine
The most ignored shift in the Indian quick commerce space is not operational but structural. Platforms are fast becoming retail media networks. Zepto’s advertising numbers reveal the growth quick commerce advertising has seen over the past few years.
The quick commerce giant’s advertising revenue grew from ₹49 Cr in FY24 to ₹651 Cr in FY25 and further to ₹1,636 Cr in FY26. In Q4 FY26 alone, Zepto generated ₹543 Cr in advertising revenues.
The UDRHP cites brands generating 5–8x Return on Ad Spend on the platform.
This is precisely the trajectory Amazon followed in the United States, where its advertising business built entirely on monetising purchase-intent traffic grew into a $50 Bn-plus annual engine that now subsidises its logistics and cloud businesses.
Zepto wants to build the same machine at a fraction of the scale, but with the same underlying logic
Plus, ad revenues do not come with a cost burden like in the case of deliveries that need dark stores, cold stores and an agile workforce. Zepto is clearly banking on its advertising business to improve the unit economics, even as its overall share in the top line is still substantially low.
The User Challenge
The company’s next challenge is sustaining user growth in an increasingly crowded market. In the March 2026 quarter, Zepto saw a decline in annual transacting users and slowing customer growth. Active user base fell to 47.97 Mn in the March 2026 quarter from 49.54 Mn in the December 2025 quarter.
This is at a time when Amazon Now was aggressively scaling discounting in Bengaluru and Delhi, and Flipkart Minutes has expanded to nearly 1,000 dark stores.
In its UDRHP, Zepto admits that customers in quick commerce have no switching cost, delivery partners operate across multiple platforms simultaneously, and the entire market is susceptible to whoever is willing to price most aggressively at any given moment.
This is exactly where Zepto faces an immediate threat from the likes of deep-pocketed ecommerce giants like Amazon and Flipkart. Amazon has already vowed to pump in millions of dollars into its quick commerce business with a discount-led strategy, while Flipkart Minutes wants to go beyond metro and tier 1 markets, which constitute nearly 30% of total GMV sales.of quick commerce platforms according to Zepto’s disclosures.
Not just this, both the players enter quick commerce with an ingrained logistics infrastructure across their core ecommerce businesses, existing consumer relationships at scale, and a risk tolerance not bound by investor pressure to hit profitability milestones.
As of now, Zepto may be heading towards the public markets with a compelling operational efficiency story, but can it survive the onslaught of competition in a market where customer loyalty follows whoever offers the best deal?
[Edited By Shishir Parasher]
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