Zepto Tightens Grip, Zomato Cuts Jobs
Quick commerce firm Zepto is shifting strategy toward profitability. Meanwhile, Zomato is laying off customer support employees as part of an operational overhaul.
Indian quick commerce company Zepto is pivoting its strategy to focus on profitability rather than aggressive growth. The company has increased its free delivery threshold and reduced discounts, aiming to improve its unit economics. This shift follows Zepto's decision to postpone its IPO in July, attributed to valuation concerns and high cash burn.
Zepto's valuation concerns stemmed from investor skepticism regarding its $7 billion valuation, significant cash burn, and the industry's lowest average order value. Compounding these issues, its transacting user base declined, and the company had just over one year of runway at the end of March 2026. These factors have necessitated a critical re-evaluation of its growth-first strategy.
New measures include raising the free delivery threshold to ₹199 during normal hours and ₹299 during peak times. Platform-led discounts have been reduced from 18-20% of MRP to 14-16%. Zepto has also launched a paid membership program, 'Zepto Club,' offering benefits like cashback and priority service, while also promoting premium grocery sales to increase basket size and margins.
Concurrently, Zomato's food delivery arm has shut down its customer support operations in Hyderabad, laying off approximately 240 employees. The remaining team will be consolidated in Gurugram. This move is part of Zomato's efforts to overhaul its customer support, following last year's layoffs of around 600 employees attributed to AI-driven automation.
Additionally, Zomato has banned dishes containing analogue dairy products, warning restaurants to comply or face delisting. Other market news includes a weak first day for Purple Style Labs' IPO and the shutdown of online grocery startup Satvacart. Brewer Bira91 faces a new insolvency threat, and electric two-wheeler sales saw a decline in August.