Zepto crosses Rs 1,000 crores in annualized ad revenue
Quick commerce companies are not the only ones who have figured out the cash flow machine from ads.
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Zepto's co-founder Aadit Palicha shared in a social media post that the quick commerce company has crossed Rs 1,000 Crores in annualized advertising revenue (Rs 83+ crore per month).
"It's been less than 3 years since we launched our Ads Business, and the team we put together has been executing like a machine. I'm honestly grateful to be working and learning from some of the smartest operators in Internet India today," Palicha stated.
Zepto's Jarvis is designed with a different purpose: to enhance visibility and boost sales for its platform's merchants. According to Zepto, the new tool is poised to reshape how brands engage with consumers, offering a direct connection between advertisers and users while fostering long-term brand relationships.
This strategic expansion into advertising signals Zepto's recognition of the growing importance of marketing within the rapidly expanding quick commerce space. The company is already seeing impressive results.
In a LinkedIn post, Rahul Mathur, Pre-Seed Investor, DeVC, says, "The underrated part of a quick commerce business is the ads platform. Ads will play a critical role in the path to profitability for QC, At a steady state, Ads Income is expected to be 3% to 3.5% of GOV (Gross Order Value)."
Blinkit did Rs 400 crore ad revenue in FY23-24 (x4 from previous year). Blinkit has targeted Rs 1,000 crore in ad revenue for FY24-25. Blinkit GOV in FY23-24 was Rs 12,500 crore i.e. Ads is already ~3.5% of GOV.
Mathur further explained that Binkit’s EBITDA is expected to be 4% of GOV in a steady state. Typically, the EBITDA margin for ads is approximately 60%. Additionally, ads contribute 3% of GOV. This means that around 45% of Blinkit’s total EBITDA is derived from ads, which is a significant portion.
"Amazon India's advertising revenue for the financial year 2024 (FY24) was Rs 6,650 crore which is ~4% of GOV — one could expect advertisers to pay a premium since QC is a ‘faster moving’ channel," he added.
Therefore, there is headroom for the quick commerce company’s ad business to grow significantly — in terms of % of GOV and in absolute figures. Along with ads — they are already tapping into sampling as another high margin revenue stream.
Quick Commerce companies are not the only ones who have figured out the cash flow machine from ads — Uber Global generated $900M in ads for CY23. Closer to home — Paytm, PhonePe, Jio have also launched ad platforms.
