Jun 4, 2022 · 1h 6m · news
Q-Commerce in Emerging Markets with the CEOs of Airlift, JOKR, & Zepto | 20VC #892 · 20VC with Harry Stebbings
Aadit Palicha · 23m spoken Ralf Wenzel · 20m spoken Usman Gul · 10m spoken Harry Stebbings · 7m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Host Harry Stebbings leads a virtual panel discussion with three prominent Q-commerce CEOs—Usman Gul (Airlift), Ralf Wenzel (JOKR), and Aadit Palicha (Zepto)—to analyze the operational realities, financial metrics, and strategic opportunities of running quick-commerce businesses in emerging markets.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 11.7% of the talking time here. How this is scored →
Harry as informed peer 3.8 Guest teaching 5.1 Guest disagreement 2.3 Harry pushing back 2.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 43:20 Aadit rejects Usman's 10-minute Q-commerce critique
Aadit directly reframes Usman's assertion that ultra-fast delivery is capital intensive, arguing that faster deliveries lower last-mile costs and boost order throughput.
Hardest push from Harry ▶ 49:29 Harry challenges Ralf on CPG ad conflictsHarry calls out a potential strategy contradiction, asking Ralf whether taking ad dollars from global CPG giants undermines his emphasis on local sourcing.
Biggest teaching moment ▶ 39:16 Aadit explains Gross Profit vs AOV metric priorityAadit educates the host on why optimizing purely for Average Order Value is misleading due to category margin differences, establishing Gross Profit per order as the true key metric.
Harry holds his own ▶ 23:44 Harry demands hard picking cost dataHarry demonstrates industry knowledge on e-commerce cost structures by pushing past general commentary to demand precise picking and fulfillment cost percentages.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Introductions & Origin Stories | 2 | 2 | 0 | 1 | Harry opens the show setting a strict 1-minute origin story challenge for each guest. Usman, Ralf, and Aadit share their founding aha moments in a friendly, conversational manner. | |
| The Advantages of Emerging Markets for Q-Commerce | 3 | 5 | 1 | 1 | The guests detail structural advantages of emerging markets like low minimum wage costs, high population density, and high purchasing frequency. Aadit quotes FedEx's CEO on density being destiny while Ralf highlights low supermarket penetration. | |
| Operational Challenges in Emerging Markets | 3 | 5 | 1 | 2 | Harry asks the guests to identify the biggest operational challenges in emerging markets. Aadit highlights bad road infrastructure and unstandardized fresh categories, while Usman notes talent and operational intelligence barriers. | |
| Supply Chain Logistics and Fresh Categories | 4 | 6 | 1 | 2 | Harry guides the topic into warehousing and margin mechanics. Ralf and Aadit explain how local sourcing yields 40-50% gross margins on fresh goods, with Aadit detailing Zepto's 12-hour farm-to-fork chain that reduces wastage. | |
| Picking, Fulfillment, and Delivery Economics | 5 | 5 | 2 | 4 | Harry directly presses the guests to reveal exact picking and fulfillment numbers to dispel market myths. Ralf, Aadit, and Usman breakdown picking costs ranging from 2% to 4% and total last-mile fulfillment costs. | |
| Delivery Fees and Pricing Strategies | 3 | 5 | 4 | 2 | The panel debates delivery fees and customer retention. Ralf rejects delivery fees as a outdated 1990s Yahoo concept, advocating instead for basket-building and higher average order value. | |
| Average Order Value vs. Gross Profit per Order | 4 | 7 | 6 | 3 | Usman asserts that 10-minute delivery models are capital-intensive and require massive density. Aadit forcefully reframes Usman's premise, arguing that faster delivery actually optimizes rider efficiency, increases high-margin fresh sales, and improves unit economics. | |
| Retail Media and Advertising Revenue Streams | 6 | 6 | 3 | 6 | Harry challenges Ralf's retail media strategy, asking if relying on big CPG ad spend conflicts with vertical integration and local sourcing. The guests discuss ad monetization and complete the interview with a rapid-fire round. |
Statements from this episode (29)
Palicha: Cutting Zepto delivery under 15 minutes tripled retention and stabilized NPS
“When we take our delivery times from 45 minutes to under 15 minutes, what we see with retention is two to three x goodness. NPS starts stabilizing at north of 85 points”
Palicha: High population density is the key driver of quick-commerce economics
“In Q-commerce density is destiny, right?”
Palicha: Zepto's average dark store processes over 1,000 orders per day
“The average, you know, dark stores that do is operating north of a thousand orders per day today.”
Palicha: Zepto's rent costs for mature dark stores are 0.7% of revenue
“Our cost of rent as a percentage of revenue for mature dark stores is about .7%, right?”
Palicha: Fresh produce drives quick-commerce adoption in emerging markets
“Customers really use your platform if and only if you can give them something that's just like viscerally and, you know, viscerally adds value immediately. And that key, what we've seen at least in India, that key category is fresh and fruits and vegetables, f…”
Wenzel: In-house supply chain creates high quick-commerce entry barriers
“You have to build a lot of that assortment or a lot of that procurement and supply chain infrastructure yourself. You have to become the warehouse and the logistic and the procurement company yourself. And only then you are able to fulfill the very high demand…”
Wenzel: JOKR hits up to 50% procurement margins on local sourcing
“Allows us to tap into a product margin into procurement margin of up to 50% if we procure local food, fresh items, or locally produced packaged food items as local and as direct as possible.”
Palicha: Zepto fresh produce wastage is 350 bps below retail benchmarks
“We're in a position where our wastage numbers are 350 basis points lower than retail benchmarks.”
Palicha: Zepto operates a 12-hour farm-to-fork supply chain in India
“For example, our fresh fruits and vegetables, we've built a 12 hour farm to fork chain. So, five p.m. Harvesting time comes out of the farm and five a.m. It's in our facilities, right you know, ready to get shipped to customers.”
Wenzel: JOKR combined picking and delivery costs are 12% to 15%
“And overall, in terms of the combined delivery and picking costs, we're currently averaging about like. 12 to 15%, depending on the market, both together as a percentage of revenue.”
Wenzel: JOKR combined fulfillment costs will converge to 10% of revenue
“What we believe that's to go down and like converge towards in a combined way of delivery and picking costs together towards like the 10% of 10% of revenue.”
Palicha: Zepto picking costs are 3-3.5% and 10-11% blended with last mile
“Yeah, I think for us right now, it's roughly about three, 3.5% on picking and then blended with last mile goes to about 10, 11%.”
Palicha: Zepto customer average order value grows 40-45% by month six to eight
“We're seeing that as customers get more and more mature to on the platform, our end-state AUV AUB ends up being, you know, 40 to 45% higher by month six to month eight in the customer's journey with us, right?”
Gul: Airlift combined picking and delivery costs are 10% to 10.5%
“Yeah, so we're currently doing between three and four percent on picking costs, and we're doing, what, six to seven percent on delivery costs. So our total comes down to about 10 to 10.5% for delivery and picking inclusive.”
Gul: Airlift aims to reduce combined fulfillment costs to 7% by year-end
“We're planning to get this to about seven percent by the end of the year”
Palicha: Zepto customer retention exceeds 95% after third order
“What we've seen, post the fifth order on Zepto, the user's likelihood to retain, or sorry, even post the third order, the user's likelihood to retain indefinitely is post-ninety-five percent. Post the fifth order, and all the way to the 11th order, that starts…”
Wenzel: Delivery fees in quick commerce are an obsolete concept like 90s Yahoo
“Look, I think delivery fees are a little bit of concept of the past, right? It sounds a little bit like Yahoo in the nineties.”
Wenzel: Higher average order value drives quick-commerce profitability better than fees
“The increase in AOV, the increase in average order value, how much you get customers to Do not, to not only order like one or two items, but indeed order like five, 10, 15 items per order has a significantly higher impact on profitability than charging like an…”
Gul: Airlift achieved a $9.20 average order value in Pakistan
“But as of January of this year, our average order value was about nine dollars and 20 cents.”
Palicha: Gross profit per order does not correlate with average order value
“So gross profit per order isn't always correlated with AOV per order. Because if you have a high benefit of fresh fruits and vegetables, the average selling price of fresh fruits and vegetables will be lower. But the amount of margin that you make will be much…”
Wenzel: JOKR maintains an average order value around $25
“The average group AOV is currently at around like, 25 US dollars, which is already representative of like a bigger grocery basket instead of just like a fill up basket.”
Gul: 10-minute delivery models require billions in capital to reach profitability
“So you're going to have to raise multiple hundreds of millions of dollars, if not billions of dollars to build the order density that is required to make that AOV profitable ultimately, right?”
Wenzel: JOKR Media will generate 10-15% of global revenue near term
“We launched our Joker media proposition only some few weeks ago and already in the first month, it's almost contributing five percent of our global revenue. And we believe that in the future for that to reach basically 10 to 15% already in the near term”
Gul: Airlift generates 1.3-2% of revenue from ads
“We're seeing between 1.3 to two percent of revenue from the advertisements platform. We've just got into this space, right? And the benchmark for Delivery Hero is about three percent.”
Palicha: Zepto will boost brand monetization to 5% by July-August
“For us, we're looking at today when you include all the different off invoice margin that we get from brands, you know, around four percent of revenue added there, and we'll probably increase that to five percent by July, August is what we're looking at right …”
Palicha: Zepto brand monetization will hit $20-25M by end of 2022
“In this current growth rate, north of, you know, 20, twenty-five million by the end of this calendar year, and, you know, significantly more at the end of it, right?”
Palicha: Quick commerce can reach double-digit EBITDA with 7-8% ad revenue
“If we can get that to seven, eight percent, there's no reason why, you know you know, this business can't be close to a double digit EBITDA business, right? I think it's very possible in the long term.”
Shorts cut from this episode
▶ The problems with shopping in LATAM · 20VC with Harry Stebbi (@8:12)
▶ Problems w/ Shopping in LATAM · 20VC with Harry Stebbings (@8:12)
▶ Delivery fees are for LOSERS · 20VC with Harry Stebbings (@34:36)
▶ Why delivery apps do better in India · 20VC with Harry Stebb (@5:15)
▶ TWO REASONS delivery apps do better in emerging markets · 20 (@4:08)