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Zepto, one of India’s fastest-growing quick commerce startups, has temporarily suspended its Zepto Cafe services in over seven North Indian cities, citing a severe supply chain crunch and workforce challenges. The disruption, which began in April, has impacted 44 dark stores across critical markets like Delhi NCR, Agra, Meerut, Haridwar, Gorakhpur, Mohali, Amritsar, and Ghaziabad—territories where Zepto had been gaining ground against food delivery giants Zomato and Blinkit.
Key Highlights:
Supply Chain and Staffing Woes: The pause comes as Zepto struggled to keep up with surging demand, leading to frequent stockouts and an inability to maintain quality standards. The company also faced internal workforce issues, with several kitchen staff refusing transfers and 15 employees resigning, further straining operations.
Impact on Workers: The halt has affected between 400 and 700 gig workers, many of whom have been redeployed as pickers and packers at other locations or offered roles in functioning cafes. Zepto is actively working to stabilize its supply chain and vendor partnerships before resuming services.
Market Dynamics: Zepto Cafe had quickly become a high-margin, high-frequency vertical, clocking over 1 lakh daily orders and nearing a $100 million annualized GMV run-rate with steady-state gross margins of 50%. The pause is expected to provide temporary relief to traditional food delivery platforms, potentially allowing them to reclaim market share in these competitive metro markets.
Competitive Pressure: The quick commerce food delivery space is heating up, with Blinkit expanding its Bistro kitchens and Swiggy scaling up rapid food verticals. Zepto’s temporary setback comes at a time when rivals are aggressively innovating and expanding.
Outlook: Zepto aims to resolve supply and staffing issues and resume Cafe operations by Q2 (July–September 2025). The company remains committed to the cafe business and plans to invest aggressively in its revival.
All eyes are now on Zepto’s next moves as it works to regain momentum in the fast-evolving quick commerce landscape.
Sources: BusinessWorld, TechStory, Financial Express, Economic Times, Moneycontrol
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