Zepto Cafe cools; Ecommerce sales pick up
Also in the letter:
■ Indian AI startups take US flight ■ ETtech Done Deals■ Shubhanshu Shukla returns to Earth
Zepto Cafe scales down amid sourcing, staffing hurdles
Zepto Cafe, the 10-minute food delivery arm of quick commerce firm Zepto, is scaling down operations as it battles supply chain issues and a shortage of trained kitchen staff. The slowdown comes just as rivals Blinkit's Bistro and Swiggy's Snacc push deeper into key urban markets.
By the numbers:
Daily order volumes fell to 65,000–67,000 in May and June, down from 120,000–130,000 at their peak.
Back in February, founder and CEO Aadit Palicha had claimed on LinkedIn that the service had crossed 100,000 daily orders.
Zepto pulled the plug on Cafe operations at 44 of roughly 1,000 dark stores in May.
Behind the scenes: The company has hit pause on several fried items as it retools its kitchen workflows. Suppliers say Zepto Cafe has cut back on order volumes and delayed pickups, with some reporting a fall in monthly order value from Rs 1.5 crore to Rs 40–50 lakh.
Also Read: Govt may increase scrutiny on quick commerce firms following hygiene, food safety issues
What's next: As Zepto trims its cash burn and recalibrates, the company is in talks with investors, including General Catalyst and Avenir Growth, to raise $500 million ahead of a planned IPO in 2026.
Also Read: Quick commerce fires up record discounts with rivals getting quicker
Mid-year ecomm sales spike sets the stage for cracking festive season
Ecommerce order volumes during the recent sale window rose 19% over the same time last year, well ahead of the sector's annual growth rate of 10–12% in 2024. Deep discounts helped fuel demand across various categories, including smart TVs, headphones, air conditioners, kids' essentials, and luggage.
Bright ecommerce outlook: The July 11-14 sale window saw overlapping campaigns from marketplaces like Amazon India, Flipkart, and a clutch of D2C brands. Analysts say this burst of activity could boost performance in the ongoing quarter, offering a breather amid what has otherwise been a sluggish period for ecommerce.
Uptick in sales: Brands such as boAt, Eume, Uppercase, Atomberg, Solara and Zouk reported a strong jump in gains. Pradeep Krishnakumar, founder of fashion brand Zouk, said, 'Typically, Prime Day is seen as a play for legacy brands and for discounts. We saw something slightly different…that Zouk as a brand actually grew more than the category.'
Festive sale preparations: Several executives said this sale window effectively kicked off festive season preparations, with brands ramping up supply chains, launching new products, and pushing fresh categories. Many are now revising their Diwali forecasts upwards, looking to stock up in line with the current surge in demand.
Also Read: Ecommerce platforms target tier-2 and tier-3 cities for festive sales growth in India
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Scoring with AI not enough to crack US enterprise code
Indian artificial intelligence (AI) startups heading to the US in search of growth are running into new roadblocks, founders and investors told ET. Fierce competition and slower decision-making are making it harder to close deals and run pilots.
Moving timelines: Sales cycles that once lasted 6–9 months are now dragging on to 12–18, as enterprises test multiple solutions and delay fresh engagements, said Pradeep Ayyagari, cofounder of agentic platform SnowMountain AI, told ET. Venk Krishnan, founder of IT firm NuWare, added that big companies in the US now face pitches from 20 firms offering nearly identical products.
Too little time: Firms don't have enough time to demo with every firm that approaches them.
The market is 'equally miserable' for buyers, another founder, Vivek Khandelwal said.
The field has become too noisy, confusing the buyers as well.
Strategic partnerships: To cut through the clutter, startups are relying on investor networks and domain experts for warm introductions, while many founders are spending extended time in the US to stay close to customers and iterate more quickly.
Keeping Count
Other Top Stories By Our Reporters
Shivali Goyal and Pritish Gupta, founders, Trupeer AI
Trupeer AI bags $3 million: Trupeer AI, an AI video platform, has raised $3 million in seed funding from early-stage investor RTP Global, with participation from Salesforce Ventures and angel investors.
Voice AI startup Navana AI raises Rs 7 crore: Navana.ai has developed three products: a voice AI contact centre, a speech recognition API, and the contact centre intelligence API. The company currently has more than 40 clients supporting voice bots in over 12 languages across the country.
A Shux-cess: After 18 days in space, Group Captain and astronaut Shubhanshu Shukla felt gravity again on Tuesday. Stepping out of the Dragon capsule with a smile and the Indian flag on his shoulder, Shukla, or Shux, became the second Indian to travel to space and the first to enter the International Space Station (ISS) as part of the Axiom-4 (Ax-4) mission.
WeWork India's road to IPO: WeWork India Management, the country's largest premium flexible workspace operator by revenue, has received approval from the Securities and Exchange Board of India (Sebi) to launch its initial public offering.
Global Picks We Are Reading
■ Microsoft and OpenAI's AGI fight is bigger than a contract (Wired)
■ xAI says it has fixed Grok 4's problematic responses (TechCrunch)
■ How BYD caught up with Tesla in the global EV race (FT)
Updated On Jul 16, 2025, 07:16 AM IST
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