Zepto launches a subscription service, increasing competition in the rapid commerce industry.

Zepto’s move comes as rapid commerce companies compete to meet client demands, grow market presence, and diversify their product offerings.

Zepto, a quick commerce startup, announced on Thursday the official launch of its paid subscription service, Zepto Pass, which will give higher discounts to consumers, increasing competition in India’s booming quick commerce market.

According to Mint, In a statement, the firm claimed, “The company piloted Zepto Pass with 5% of its user base for a month and saw rapid adoption—within two weeks of the pilot, almost all orders came from Zepto Pass subscribers.”

According to the company, Zepto Pass subscribers raised their app spending by more than 30% and had a 10% improvement in monthly retention. The subscription, which costs between 19 and 39 rupees per month for the bulk of users, includes unlimited free delivery and up to 20% off grocery products.

According to Devendra Meel, vice president of strategy and head of Zepto Pass, the change is meant to increase customer acceptance of fast commerce.

Zepto, founded in 2021 by Stanford University dropouts Aadit Palicha and Kaivalya Vohra, offers 10-minute grocery deliveries across its network of dark stores countrywide. It competes in the highly competitive rapid commerce space against Swiggy’s Instamart, BigBasket’s BBNow, Zomato’s Blinkit, and Google-backed Dunzo, all fighting for market share and profitability.

Zepto intends to enroll a million subscribers in the subscription plan within a month of its launch. 

“Even after providing compelling value to customers with Zepto Pass, we remain on target to be nearly PAT (net profit) positive in two quarters. This is because our profitability gain is predominantly driven by cost reduction through supply chain excellence, allowing us to deliver value back to clients in a sustainable manner,” stated Palicha, Zepto’s co-founder and CEO.

Palicha further stated that the subscription model is projected to increase average order value (AOV), offsetting the expense of discounts with a combination of business and brand investment. 

“We’re in a position where we can afford to take the impact since our supply chain costs have dropped significantly. “All of our core productivity metrics have improved, throughput has increased, and waste has decreased,” Palicha stated in an interview.

Zepto’s move comes as rapid commerce companies compete to meet client demands, grow market presence, and diversify their product offerings. According to consultancy firm RedSeer, India’s fast commerce sector is predicted to grow to $5.5 billion by 2025, up from $0.3 billion in 2021.

Meanwhile, Palicha stated that the company is on track for a public listing in fiscal year 2025-26. 

According to Mint, “Obviously, it depends on the cost of capital, depends on where we see private markets going but right now we are building out all the internal infrastructure—whether it’s the financial controls, whether it’s the reporting, whether it’s having a big board or a statutory auditor, all the core controls needed, we are building out to be a public company,” he went on to say.