Zepto Expands Tamil Nadu Footprint With Over 20 Dark Stores

Quick commerce major Zepto has expanded its presence in Tamil Nadu by launching more than 20 dark stores across several districts, including Coimbatore, Tiruchirappalli, Madurai, Vellore and Salem.

Each store is strategically positioned to optimise delivery routes within a 2-3 km radius, allowing delivery partners to maintain a speed of 15-20 km/h, the company said in a statement.

“Tamil Nadu is a key market for Zepto, with its dynamic urban centres and strong demand for convenience,” said Divesh Sawhney, chief growth officer at Zepto.

As part of this expansion, the company has launched its first-ever women-only dark store in Chennai’s Madambakkam. 

Beyond urban expansion, Zepto has also partnered with over 100 Tamil Nadu farmers to source premium tender coconuts and green vegetables from Palacode and Pollachi. These products will also serve its customers in Bengaluru, Hyderabad and Delhi.

The Tamil Nadu stores will feature a selection of regional favourites, including snacks like Murukku, traditional ingredients such as cold-pressed oils, jaggery, premium rice varieties, and a range of national and global brands across categories such as fresh fruits and vegetables, personal care, electronics and fashion, the statement added.

Zepto’s Tamil Nadu expansion comes amid aggressive scaling by competitors in the quick commerce space. On Monday (February 24), it was reported that Zomato injected INR 1,500 Cr into Blinkit, bringing its total investment in the quick commerce arm to INR 4,300 Cr since acquisition. 

This funding will help Blinkit, which recently surpassed 1,000 dark stores after adding 216 new locations in Q3 FY25, in its ambitious plan to reach 2,000 stores by December 2025.

Meanwhile, Swiggy Instamart added 96 new dark stores in Q3 FY25, bringing its total to 705, while also increasing its average store size from 3,200 sq ft to 3,475 sq ft. 

However, the intensifying competition has impacted Instamart’s margins, with its contribution margin dropping to -4.6% in Q3 FY25 from -1.9% in the previous quarter, largely due to higher customer acquisition costs and increased investments in expansion. 

The entry of ecommerce giants Flipkart and Amazon into quick commerce, alongside increased focus from JioMart and BigBasket, has further intensified competition

Meanwhile Zepto is also in talks with several top mutual fund houses to facilitate share sales worth $300 Mn ahead of its IPO, according to a report earlier this month. Aadit Palicha, cofounder and CEO of Zepto has reportedly met executives of top mutual funds including SBI Mutual Fund, Axis Mutual Fund, and ICICI Prudential Mutual Fund.

This follows the quick commerce major’s $350 Mn fundraise from high net-worth individuals in November last year, taking its 2024 funding total to $1.3 Bn.