Quick-Commerce Economics: Airlift, JOKR and Zepto Founders Debate Emerging Markets

In this 2022 roundtable, Airlift founder Usman Gul says the company entered quick commerce after his team struggled to get groceries delivered quickly during the pandemic. JOKR founder Ralf Wenzel describes inefficient procurement and supply chains as the opportunity he wanted to address.

Zepto founder Aadit Palicha says his team had been experimenting with grocery delivery. He recalls that shortening delivery from about 45 minutes to under 15 was associated with substantially better retention and strong customer satisfaction in its own tests; the panel does not supply the study design or independently verify the figures.

Gul argues that lower labor costs and the potential for wider product selection can improve the economics of quick commerce in emerging markets. His claim about a straightforward path to positive free cash flow is a company founder's forecast, not evidence that the entire business had achieved it.

Palicha emphasizes population density in Indian cities and frequent grocery shopping habits. He says Zepto's average dark store handled more than 1,000 orders a day at the time and that mature-store rent was below one percent of revenue; the figures are company-reported and the automatic captions are imprecise on the exact rent percentage.

Wenzel argues that shoppers in some Latin American cities face fragmented supply and long travel times for groceries and other frequent purchases. He sees an opportunity to offer a broader supermarket-like assortment, rather than only occasional convenience purchases.

Palicha identifies roads, flooding and other infrastructure disruptions as operational challenges. He also says fresh food is important to customer use but difficult to source consistently because production and quality are not standardized across suppliers.

Gul emphasizes the challenge of building a team with detailed logistics and operating expertise. Wenzel adds that customers may expect a broad assortment while existing distributors cannot always replenish it flexibly, requiring companies to build more of their own procurement and supply chain.

Wenzel advocates local sourcing and a combination of small fulfillment hubs with larger distribution centers. He argues this can shorten supply chains and increase product margins; his environmental and economic benefits are claims and depend on the circumstances, not established results of this discussion.

Wenzel says selected locally sourced fresh and packaged categories in Latin America can have procurement margins up to 50%. This is a category-level company claim before the wider costs of fulfillment, not a company-wide profit margin.

Palicha says fresh produce drives repeat purchases and can have direct buy-sell margins of 40% to 50% when sourced at scale. He says controlling spoilage is essential and claims Zepto's waste was below an Indian retail benchmark; the benchmark and calculation are not independently supplied.

He describes a farm-to-facility supply chain, quality checks and fresh categories including produce, meat, bakery and milk. He says these fresh categories represented over 40% of Zepto's revenue at the time, an unverified company figure.

Gul says fruit and vegetables anchor Airlift's offering. He identifies local purchasing, consolidated distribution and fast inventory turnover as levers for procurement efficiency and reduced waste.

Asked about picking costs, Wenzel says JOKR's were roughly 2% to 3% of revenue and combined picking and delivery were about 12% to 15%, depending on the market. He predicts further reductions through scale and automation; the targets are not achieved results.

Wenzel argues that more neighborhood density could enable batching orders and improve delivery efficiency. He says riders were then making individual trips from a hub and returning before the next order, leaving room for a different process.

Palicha reports Zepto picking costs of roughly 3% to 3.5% of revenue and combined picking and last-mile costs of roughly 10% to 11%, with lower figures in mature sites. He hopes mature picking costs can fall toward 2.5%; he also expects rising order values to affect the ratio.

Gul reports Airlift picking costs of 3% to 4% and delivery costs of 6% to 7%, with a combined figure around 10% to 10.5% of revenue. These approximate ranges overlap imperfectly; the panel does not reconcile the arithmetic or provide a detailed cost definition. His approximately 7% year-end combined target is a forecast.

Rather than watch only cost as a share of revenue, Gul tracks inputs: orders picked per worker-hour, idle time and order density. He says favorable ratios can conceal weak labor efficiency when order density is high.

The founders disagree on delivery fees. Palicha says Zepto introduced fees after customers had placed several orders and observed limited customer drop-off, though some frequency fell and average order value rose; his retention percentages and exact measurement are not documented in the interview.

Palicha argues faster delivery can reduce cost per order if each rider completes more orders per hour. He describes some mature Zepto markets as free-cash-flow positive, a site or market-level company claim that does not establish company-wide profitability.

Wenzel is skeptical of broad delivery fees, arguing they can suppress adoption and basket building. JOKR was testing a fee for very small baskets, but he favors wider assortment and higher order value as the main economic lever.

Gul says Airlift's average order value in Pakistan was about $9.20 in January 2022, while citing lower figures for other providers from outside reporting. Exchange-rate changes and different company or market definitions limit a direct comparison.

Palicha argues average order value alone can mislead: fresh goods may sell at lower prices but carry higher margins than packaged goods. He prefers gross profit per order as a north star and gives approximately 100 rupees for mature markets; the panel does not fully define that measure.

Wenzel reports JOKR's group average order value around $25 and says some mature markets were higher. These are company-reported values across different geographies and should not be compared mechanically with Pakistan or India.

Gul distinguishes an ultra-fast, lower-basket model from Airlift's roughly 30-minute, broader-assortment approach. He predicts the former may require more density and capital to become profitable, while acknowledging more than one model could succeed.

Palicha pushes back, saying faster delivery at Zepto can increase fresh-category adoption, order density and utilization, supporting lower unit costs. His account includes individual cash-flow-positive stores, but it does not resolve the broader company-level profitability question.

Wenzel introduces JOKR's advertising product, launched only weeks earlier. He says it contributed nearly 5% of global revenue in its first month and forecasts a larger future share; neither the calculation nor the forecast is independently verified here.

Stebbings asks whether reducing reliance on large consumer brands conflicts with selling them advertising. Wenzel says the businesses differ by category: fresh goods can be sourced locally while branded packaged goods can generate advertising revenue.

Gul says Airlift's nascent advertising platform contributed roughly 1.3% to 2% of revenue, and he hopes the share will increase. He notes JOKR's reported figure with interest; these are company-specific revenue shares, not profit margins.

Wenzel attributes JOKR's claimed advertising traction to limited targeted alternatives for brands and its geographic reach across Latin America. These are his commercial explanations and not independently established causal findings.

Palicha says Indian brands have an opportunity to advertise near the point of purchase. He describes off-invoice margins, brand-funded discounts and other monetization as well as advertising; these are distinct categories and should not all be labeled ad revenue.

He estimates that the broader brand-related contribution was around 4% of Zepto revenue and predicts it could rise. He also offers future revenue and profitability scenarios; the transcript does not provide enough detail to verify their annualization or treat them as achieved results.

Palicha argues short delivery times allow small, frequent purchases of items such as beverages and snacks, creating inventory and promotion opportunities for brands. This is a founder's explanation of Zepto's business, not a controlled comparison with other retailers.

In the closing round, Gul disputes the idea that quick commerce necessarily has poor economics and predicts several paths to profitability. Palicha expects a market with several potential winners and losers, rather than a single winner-take-all outcome.

Wenzel would rename the category to emphasize assortment, personalization and an integrated retail model rather than speed alone. He also expresses a sustainability ambition, which the panel does not substantiate with a comparative environmental analysis.

Gul predicts Airlift could reach free-cash-flow positivity across its Pakistan markets around the fourth quarter or first quarter, within six to nine months of the conversation. This was a 2022 forecast, not a reported company-wide achievement.

Palicha wishes investors would distinguish the economics of each company and market instead of treating all quick-commerce models alike. Wenzel closes by arguing that direct sourcing can address supply-chain inefficiencies; both have commercial interests in the models they advocate.

Stebbings thanks all three guests and ends the discussion. The episode description identifies 20VC as an Airlift investor, a relevant financial relationship for the host's discussion of the company.