Optimistic of growing 2-3X every year, will surpass offline retailer DMart soon: Zepto CEO

Pointing out that grocery and household essentials are the “mother of all categories” sold on leading e-commerce platforms Flipkart and Amazon in India, Palicha said the grocery market was around $650 billion in India in FY23, and at 9 per cent CAGR, is expected to become $850 billion by FY29.

“If you look at electronics, apparel, furniture, and combine everything, and double it, it’s still not as large as grocery and household essentials,” he said.

“If we execute well, we can realistically take this business from over Rs 10,000 crore in top line today to potentially Rs 2.5 lakh crore over the next 5-10 years,” he said. “We have been able to turn 75 per cent of our stores fully profitable and so we want to continue that trajectory even as we are expanding into new cities,” Palicha said.

Last month, Zepto raised $665 million in an investment round that valued the firm at $3.6 billion, almost triple of what it was worth a year ago, and is preparing to list soon.

The three-year-old startup raised $665 million (about Rs 5,550 crore) from new investors, including New York-based private equity firm Avenir Growth Capital, venture firm Lightspeed, and Avra Capital, a new fund started by former Y Combinator Continuity head Anu Hariharan and Andreessen Horowitz. Existing investors, including Glade Brook, Nexus, and StepStone Group also participated. Palicha said the biggest challenge for the company is to hire people in the company with right attitude.

The startup plans to double warehouses used to deliver groceries within 10 minutes in a radius of two kilometres to more than 700 by March 2025 by reinvesting sales from mature stores to fund the expansion.