How Same-Day Delivery Startup Zippee Is Redefining D2C Logistics In Quick Commerce Era

When quick commerce became all the rage at the peak of the Covid-19 pandemic, no one was convinced that the 10-minute grocery delivery format would be sustainable. After all, Amazon was already going deeper into same-day and next-day delivery and Walmart-owned Flipkart was attempting to follow suit.

But as new players like Zepto and Blinkit rewire customer expectations and set industry standards, convenience has emerged as a core component for driving success across Indian retail, the world’s third-largest market after China and the US. 

Globally, the quick commerce opportunity is estimated to reach $303.3 Bn by 2030, from $38.9 Bn in 2023, at a CAGR of 34.1% during the forecast period. However, the widespread consumer use of quick commerce has not always spelt well for emerging e-tailers or direct-to-consumer (D2C) brands in India, says Madhav Kasturia, founder & CEO of Zippee, a fulfilment platform enabling same-day delivery for digital-first consumer brands & marketplaces across India — via their own websites. 

“Over a lakh of India’s brands face a myriad of obstacles when partnering with quick commerce platforms: Category limitations, opaque listing process, unsupportive category managers, hefty platform commissions and reduced visibility against category leaders are just some of them. With limited resources and brand recognition, breaking through a fiercely competitive market is an uphill battle,” he added.

D2C brands are often required to pay high commission on sales to list on q-commerce platforms, while larger established FMCGs enjoy more favourable terms and conditions. The reason: brand leverage. A highly-funded, growth stage brand may still get by, but what about those in their 0-10 journey? 

The D2C dilemma is bound to make the q-commerce listing decision quite tricky. On one hand, brands can open yet another door (currently touted as the hottest new distribution channel) for their customers to drive incremental sales. On the other, most brands on the platforms are not making sustainable tailwinds, with skyrocketing commissions eating into their margins. 

Kasturia identified these issues early in the day and claims to have found the sweet spot, a midway between traditional courier delivery times that take three+ days and the cost-intensive 10-minute hustle. 

Zippee provides a same-day delivery window for D2C brands powered by q-commerce-like dark stores, dedicated in-house teams for last-mile deliveries and a tech ecosystem required to run such a delivery network. 

For instance, the startup has maximised operational efficiency by using optimal inventory management, efficient order batching and picking, route optimisation and live order tracking. Additionally, its automated communications suite keeps customers informed throughout the delivery process, reducing return-to-origin (RTO) rates and increasing customer satisfaction and net promoter score (NPS).

More importantly, an extended timeframe than the 10-minute rush enables Zippee to control delivery costs, creating a win-win scenario for brands, consumers and the delivery platform.

Currently, Zippee operates dark stores in Tier I cities such as Delhi, Mumbai, Bengaluru, Hyderabad, Pune, Kolkata, Chennai, etc. It caters to D2C brands and marketplaces across FMCG (food and beverage), beauty personal care, petcare, apparel, babycare and more. Notable brands on the platform include Supertails, GIVA, Ultrahuman, Epigamia, Lenskart, Clinikally, Haldiram’s and Two Brothers Organic.  

Zippee promises rapid delivery using q-commerce-style dark stores

 How Zippee Fixes Quick Commerce Pain Points 

Ecommerce players delved into the consumer psyche and leveraged fast delivery to fulfil innate desires for immediate rewards, convenience and a sense of control. 

But with the explosion of quick commerce, fast deliveries need to be relooked with a fresh lens. 

Kasturia says Zippee has a critical gap to fill in this logistics jigsaw. 

To begin with, q-commerce thrives on a hyperlocal model and requires a more nuanced approach to scale. What sells briskly in one neighbourhood might barely move in another, forcing businesses to figure out how each dark store can best service the specific needs and preferences of its nearby markets. 

In contrast, D2C brands tend to impact their entire consumer base instead of minuscule segments and may not require a hyperlocalised product strategy to drive growth.   

Other risky points stem from the rigid 10-minute delivery model and inflexible operational design. 

“While speed is vital to building customer trust and loyalty, quick commerce players often restrict brands to just 2-5 SKUs, a significantly narrower assortment-mix than traditional online marketplaces. Hence, the appeal of 10-minute delivery may not always outweigh the broader category selection & SKU offered by marketplace giants & brands, who’re rolling out rapid deliveries as well,” said Kasturia.

Moreover, brands often lose out on valuable customer data that platforms control, hindering their ability to analyse behaviour, preferences and re-target consumers to offset CAC — something that has been pivotal for the rise of D2C websites in India, he added.

Kasturia said that Zippee has experimented with a frugal yet practical approach to last-mile delivery . “10-minute delivery being a capital-intensive consumer model, addresses different consumption occasions, primarily impulse needs like groceries. If you look at the logistics industry, you will also find numerous courier players in India offering 3-10 day delivery services. But no one has sustainably reduced those delivery TATs (turnaround times) to 3-10 hours with a focus on consumer brands,” he said.     

The pharmaceutical sector is a case in point. “Many pharma products don’t fit into the 10-30 minute emergency use cases. Most e-pharmacy orders today are for routine medicines where same-day delivery can significantly enhance user experience,” said Kasturia. 

Balancing cost optimisation with speed: The Zippee way

Clinikally-Zippee Tie-Up: A Case Study In Optimised Delivery & Cost Efficiency

“Our strategy to focus on a same-day delivery window allows us to cover a broader service area, batch more orders per rider trip and optimise logistics costs. It’s effective,” said Kasturia.

A case in point is the dermatech marketplace Clinikally, set up in 2022 by Arjun Soin. Specialising in personalised skin and hair treatments, the startup struggled with traditional courier services. Its lengthy delivery schedules led to high RTO rates, with nearly 27% of orders being cancelled due to delays. 

It came across Zippee’s same-day delivery services allowing it to improve delivery time for customers looking for prescription-grade medicated products at the earliest. 

This also enhanced customer experience through better visibility into order status. “Our WhatsApp bot  enabled  cash-on-delivery (COD) order verification, real-time delivery tracking, as well as automated NDR management flows to boost Clinikally’s delivery fulfilment rates & reduce support queries,” said Kasturia.

These measures yielded excellent results. Clinikally team saw an 81% reduction in RTOs due to cancellations and incorrectly/mistakenly placed orders, significantly cutting forward logistics costs and streamlining inventory management. According to Kasturia, Zippee’s efficiency led to 92% of COD order fulfilment, with more first time Clinikally customers returning and opting for non-COD payments as their trust in the brand grew.

How ‘Rapid’ Delivery Formats Are Shaping The Future of Ecommerce Logistics

“Today, we don’t hear brands asking: Why same-day delivery?” said Kasturia. “All they want to know is how fast we can do it. This is the biggest mindset shift we have observed across the industry.”

The founder claims that Zippee currently operates on a brand waitlist for same-day delivery & has mapped 1.5K brands in the past two years to identify growth opportunities within the ecommerce landscape. Its research revealed that more than 60% of D2C orders originate from India’s top 10 cities. However, Tier II locations and beyond are rapidly becoming a focal point for many brands.

To cater to this growth, Zippee aims to bring same-day delivery to online shoppers in more than 20 Indian cities by expanding its network of dark stores beyond Tier I. The logistics startup has begun its deep diving into the Bharat market and is initially targeting Jaipur, Chandigarh and Kochi. It has started piloting 2-hour deliveries in select locations across the country.

The Gurugram-based startup has previously raised $3M from multi-billion dollar consumer giant Haldiram’s along with a group of marquee angels such as Kunal Shah (CRED), Ashneer Grover (Bharatpe), Peyush Bansal (Lenskart), Prashant Pitti (easemytrip), Raj Shamani (House of X), Aakash Anand (Bella Vita Organics), Arjun Vaidya (V3 Ventures) to scale its tech infrastructure and dark store footprint across India.

Now, the question is: Will India beyond metros provide an ample market opportunity to new-age logistics startups like Zippee which are facing competition from deep-pocketed ecommerce marketplaces with in-house delivery networks  (Amazon and Flipkart, for instance) and 3PL players  (XpressBees, Delhivery and others)? 

Based on a survey by Invesp, a staggering 80% of urban online shoppers in India desire same-day shipping, with 61% expressing the desire for even faster deliveries, within one-three hours of placing an order.

On the other hand, a recent PwC India report states that 54% of consumers in Tier II, III and IV locations value deals and offers over quick deliveries –  which may be rooted in gaps in purchasing power and differences in consumer psychology between metropolitan areas and smaller cities.

However, aspirational consumers beyond Tier I now expect the same level of services available in metros, where rapid delivery formats of all sorts are increasingly seen as a core component of the e-shopping experience. D2C brands need to adopt a balanced approach when entering these regions. Combining value for money with instant gratification will be essential to reach where the next billion customers are, thus paving the growth path for the likes of Zippee.

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