Zepto Discounts Comparable With DMart Ready, But In-House Food Delivery Costlier Than Peers: CLSA

Zepto, a key player in India's quick commerce industry, is offering discounts that can be compared with DMart Ready, the online arm of retail giant DMart, according to a note released by CLSA on Thursday.

Analysing the selling price of various products under a regular cart, the brokerage firm found that Zepto Super Saver platform — which levies no delivery charge on orders worth at least Rs 1,000 — offers a discount of 11.6% against the maximum retail price.

In comparison, the CLSA note stated that DMart Ready offered a discount of 14.9% on the MRP of the same products under the regular cart.

Although Zepto's discount is projected to be 330 basis points lower than DMart Ready, it is significantly higher as compared to the discount offered by its top quick commerce rivals, as per the note.

For the same regular cart, Swiggy Instamart was found to be offering a discount of 7%, and Zomato's Blinkit offered a discount of 6.8%, according to CLSA.

The brokerage found BigBasket's BB Now and Flipkart's quick commerce arm, Flipkart Minutes, offered discounts of 7.1% and 6.6%, respectively, on the same regular cart.

The top three quick commerce players — Blinkit, Instamart and Zepto —have all forayed into in-house food delivery services where they operate via cloud kitchens situated within dark stores. The objective is to deliver snacks such as sandwiches, tea, samosas and even meals within 15 minutes.

In this segment, Zepto operates through Zepto Café, Blinkit operates via Bistro, and Swiggy recently launched Snacc.

CLSA, while analysing the prices of seven commonly ordered snacks, found Zepto Café's total bill to be higher as compared to Bistro and Snacc.

Zepto Café's overall bill for poha, ginger tea, samosa, maggi, chicken momos, veg momos and cold coffee came in at Rs 970, as per the note. This was higher as compared to Rs 911 in case of Bistro and Rs 851 when ordered through Snacc, it added.

However, the location used for price comparison was different for the three firms. Mumbai was picked for Zepto Café, Gurgaon was mentioned as the location for Bistro and Bengaluru for Snacc.