Why ? Zepto removes handling, surge fees from all orders weeks after $450 million funding boost.

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 Here’s a detailed article on the recent move by Zepto — the Indian quick-commerce startup — removing handling and surge fees just weeks after a large funding infusion.

Background: Zepto’s funding boost

Zepto recently secured a funding round of USD 450 million, which valued the company at about USD 7 billion. 
According to the company, the funds leave it with “approximately USD 900 million of net cash in bank” and “well-capitalised for the future”.
This injection comes at a time when the Indian “quick commerce” (ultra-fast grocery & essentials) market is heating up, and competition is intense.

What’s changed: Fee removal & delivery minimum adjustments

Under its new “All New Zepto Experience” initiative, Zepto has made the following changes:

  • Removed handling fees (previously charged in addition to delivery) on all orders.

  • Removed surge fees / rain-fees (i.e., extra charge when demand or weather conditions high) on all orders.

  • Lowered the minimum order value for free delivery to ₹99.

  • For orders below ₹99, a flat delivery fee of ₹30 will apply, but still no handling/extra small cart fee.

  • In short: If you order ₹99 or more, you pay product cost only; no hidden extra charges for handling or surge.

Why this matters

  • Consumer-friendly move: For shoppers, this is a clear win. Fee transparency, lower effective cost, and a simpler price structure make it more appealing.

  • Competitive positioning: The Indian quick commerce arena (with players like Blinkit and Swiggy Instamart) is crowded. By eliminating fees, Zepto is aggressively positioning to grab market share.

  • Scale & loyalty strategy: With big funding behind it, Zepto may be willing to absorb margin pressures in the short term to build scale, increase order volumes, lock-in customers, and ideally reach more favourable unit economics later.

Risks & Sustainability

While the move is bold, a few caveats are worth noting:

  • Unit economics pressure: Quick commerce is logistics heavy (costs of last-mile delivery, dark store stocking, inventory spoilage especially for perishables). Eliminating fees cuts revenue per order unless offset by higher volume or lower cost. The Financial Express article flags the uncertainty of zero-fee models.

  • Competitive response: Rivals may react (fee cuts, promotions) leading to margin compression industry-wide.

  • Short-term vs long-term: The funding cushion helps, but if cost structure doesn’t improve, the heavy subsidy model may not be sustainable forever.

  • Minimum order value (MOV) trade-off: Lowering MOV to ₹99 may increase number of small orders (higher cost per order) unless basket size and repeat behaviour improve.

Strategic Implications

  • For Zepto: The fee cut signals a shift from “charge extra for convenience” to “make convenience cheaper and simpler”. It aligns with building customer acquisition momentum.

  • For the market: It may accelerate a price war in the quick-commerce sector. As one major player reduces charges, others may be forced to follow or differentiate via service quality, speed, or product range.

  • For consumers: More attractive deals, simpler pricing, potentially more frequent usage of quick-commerce platforms, especially for small basket purchases.

  • For investors: This move could be part of the growth play — use funds to scale and lock in market share now; monetisation and profitability may come later.

What to watch next

  • Volume & retention metrics: Will more customers order via Zepto, and will they stay loyal once the novelty subsides?

  • Average order value (AOV): If AOV goes down (due to lower MOV), cost per delivery may rise unless offset by frequency or efficient logistics.

  • Cost per delivery: Last-mile delivery cost trends, infrastructure cost, dark store efficiency.

  • Competitive moves: How do Blinkit, Instamart respond on fees, MOV, service offerings?

  • Profitability path: When will Zepto attempt to raise fees again, or shift to higher margin verticals (fresh produce, premium items) to improve economics?

Conclusion

Zepto’s decision to remove handling and surge fees — right after a large funding round — is a strong signal of aggressive growth focus. For consumers, it’s clearly a win. For the company and the sector, it underscores how critical scale, cost control and unit economics will be in the rapidly evolving quick-commerce space. Whether this pricing strategy is sustainable remains to be seen, but it certainly raises the stakes in the Indian delivery business.

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