Zepto Cafe, the food delivery division of Zepto, is scaling back operations.
Despite its reputation for delivering hot food in less than ten minutes, Zepto Cafe is reportedly having trouble running its business due to supply chain problems and a lack of skilled kitchen employees.
As per our report in February, with Zomato-owned Blinkit and Zepto holding larger market shares, Swiggy Instamart is behind in India’s competitive quick commerce market. Blinkit leads with a 46% share, followed by Zepto at 29%, and Swiggy Instamart at 25%.
Zepto Cafe Scales Back 10-Minute Meal Service Amid Supply and Staffing Challenges
This action comes as rivals like Swiggy’s Snacc and Blinkit’s Bistro are rapidly growing in big cities, intensifying competition in the 10-minute meal delivery market.
According to people with knowledge of the matter, Zepto Cafe’s daily orders fell precipitously in June as compared to the previous few months.
Zepto seriously reevaluated its business model in May when it closed cafe services at 44 of its approximately 1,000 dark stores.
Insiders blame the retraction on a broader attempt by Zepto to lower cash burn in addition to staffing and supply issues.
Zepto Slows Expansion of Dark Stores Amid Operational Recalibration
New dark stores, which are small-format warehouses used for lightning-fast deliveries, are also being delayed by the four-year-old startup.
In the meantime, rivals are catching up. In the quick commerce space, Blinkit (supported by Zomato) and Swiggy’s Instamart have been expanding, particularly between April and June.
Although Swiggy and Blinkit have also slowed the opening of new dark stores, they are leading the way in food delivery, using services like Swiggy’s Snacc and Blinkit’s Bistro to serve urban consumers.
The quick commerce industry is changing quickly, and one of the main battlegrounds is food delivery.
The difficulty of attaining operational efficiency while competing in a market with high expectations and high burn is highlighted by Zepto’s decision to reduce Zepto Cafe.
How Zepto handles staffing concerns, logistics, and competitive pressure in the near future will determine whether it adopts a new strategy or brings back the Cafe model.
