He managed to succeed with a classic formula in the business world: finding the solution to a problem.
But in the case of Aadit Palicha, what is most surprising is his youth – he is barely 20 years old – and the speed with which he has been able to create from scratch a business that is currently valued at US$900 million.
Palicha is co-founder of Zepto, a company that is dedicated to home delivery of all kinds of groceries with the promise of making deliveries in less than 10 minutes and that currently It is considered as one of the fastest growing start-ups in India.
“It’s been a pretty crazy ride. We launched Zepto in July 2021 and since then, in about 16-17 months, we’ve gone from selling nothing to about $200 million in annual sales. We expect this growth trajectory to lead to sales $1 billion per year in the third or fourth quarter of 2023,” Palicha said during an interview with the BBC’s Radio Business Daily programme.
But how have they done it?
It all started during the coronavirus pandemic. Palicha and his co-founder, Kaivalya Vohra, were living in Mumbai and looking for a business idea.
“During the first confinement to get foodit was a complete nightmare. Most of the offline options were closed and the online options took 6 or 7 days at best, given the prevailing chaos,” he says.
“For the two of us it was a tremendous effort to fix that and when we talked to our neighbors – most of whom were much older than us – we saw that it was a huge problem for them. So the idea came to us: why don’t we deliver food to them? And that ended up becoming Zepto: a faster, more convenient, reliable and fresh way to get food,” he adds.
Deliveries in 10 minutes
One element that sets Zepto apart from the competition is its promise to deliver orders within 10 minutes.
What is your secret? The so-called ghost stores (or supermarkets).
“We deliver purchases in 10 minutes essentially thanks to a network of micro-stores or ghost stores that we have partnered with around the country,” says Palicha.
He explains that when a user opens the Zepto app, they find a list of more than 5,000 well-organized products, but behind that What the system does is connect the buyer with the ghost micro store closest to the place where the order must be delivered.
These warehouses are dedicated solely to this function and are organized to optimize the entire process of locating and packing the requested products so that this can be done in less than 90 seconds.
Then, the order is placed in the hands of a delivery person who -thanks to the location of the stores- have to make routes that on average do not exceed 1.7 kilometers. “That doesn’t require you to go very fast. Actually, we are able to deliver quickly thanks to short distances rather than high speeds [de los repartidores]“, Palicha points out.
The decision to set the delivery time at 10 minutes was not the result of chance, but the result of tests they carried out with different possibilities and which showed them that they could obtain more income with that option.
“We found that the frequency [de consumo] of customers was much higher if you deliver in 10 minutes. There are many cases in which making a delivery in 30 or 40 minutes is fine, but there are some very urgent cases in which those times are not enough – when someone needs rice or shaving cream but immediately. So you get more orders from the same customer with delivery in 10 minutes,” says Palicha.
concretize the achievements
Currently, Zepto operates in the main cities of India and has more than 1,000 people working in its offices and tens of thousands of couriers.
However, Palicha is cautious when it comes to declaring his venture a success.
“We don’t feel like we’re already successful. Only once we are a highly profitable, publicly traded company will I put a flag on the ground and say we are successful.. I think we have only scratched the surface now. In fact, thinking of ourselves as successful is actually a bit dangerous because there’s so much more we can do,” she says.
“You can feel good about it. My company is valued at US$900 million – which is a lot of money – and I’m 20 years old. But the reality is that – as one of our main investors says – a US1,000 start-up million is three errors away from going to zero. So until you have completed your run [haciendo a la empresa rentable y cotizando en bolsa] you can go to zero at any time,” he adds.
“If we don’t screw up now and continue to work as we have, this is a potentially game-changing opportunity in one of the largest markets in this country,” he concludes.
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