Zepto, under watch for dark patterns, may tweak checkout experience

Mint

3 days ago

Bengaluru: Quick commerce firm Zepto is planning changes to its Super Saver feature as part of a broader overhaul to eliminate hidden charges and clean up dark patterns on its platform, according to two people familiar with the matter.
The firm is looking to merge the Super Saver tab with the main Zepto tab in the coming weeks, as well as waive off some additional fees like fulfilment charges and handling fees, the two people said, requesting anonymity. It is not immediately clear if Zepto will do away with the same charges on the main tab as well.
The move is expected to reduce clutter on the website as well as give better clarity to consumers on cart value and other charges, said one of the persons quoted above. However, the average order value on the platform may see some impact, this person said.
Zepto declined to comment on the matter.
This comes at a time when Zepto and several other online marketplaces have come under the government radar for dark patterns or sneaky online practices designed to mislead users into making unintended purchases or subscriptions.
In June, the Central Consumer Protection Authority (CCPA) directed several online commerce platforms—including Zepto, Amazon, Uber, and Rapido—to conduct self-audits within three months to identify and eliminate these dark patterns, Mint reported earlier.
India is the first country to issue dedicated guidelines to regulate dark patterns. Government officials have said that the aim is not to hamper digital commerce but to ensure that its rapid growth is matched by ethical standards and consumer safeguards.
Several consumer forums have called out quick commerce platforms for manipulating customers by inflating product prices on the basis of the smartphone they use, making free delivery option manual instead of automatically applying it to an eligible cart, introducing multiple additional fees like handling, packing and tips, and creating false urgency by stating low stock and flash sales.
'There's still a long way to go. Dark patterns are so deeply ingrained in the systems and simply fixing one feature won't have a significant impact on customer trust. Overall, the customer experience has been eroded," said Satish Meena, advisor at consulting firm Datum Intelligence. 'Platforms in their hypergrowth phase tend to ignore that their customers are capable of looking beyond convenience."
Zepto—which has raised more than $1.95 billion till date and is valued over $5 billion—is also re-evaluating its growth strategy to curb losses ahead of a public-market listing. The firm posted a loss of ₹1,248 crore in the financial year ended March 2024, while its revenue surged two-fold to ₹4,454 crore year-on-year.
The firm has reportedly postponed its initial public offering (IPO) plans to 2026 as it focuses on cutting losses and raising another round of private funding. Earlier this week, Mumbai-based NBFC Elcid Investments pumped in ₹ 7.5 crore in the firm as part of a larger funding round, acquiring a 0.039% stake.
In May, Zepto also scaled down its 10-minute food delivery service Zepto Cafe in several cities in north India, following challenges surrounding sourcing of material and shortage of trained kitchen staff. The firm has also slowed down the expansion of dark stores.
Super saver feature
Swiggy Instamart and Zepto's basket-building feature was introduced to enlarge cart sizes and therefore reduce costs per order. Swiggy introduced 'Maxx Saver' in April, unlocking discounts on orders above ₹999. Zepto's Super Saver was rolled out in September 2024, offering discounted prices on orders crossing ₹399.
Within three months of launch, Swiggy's move bore fruit. In the quarter ended June, the firm's average order value in quick commerce reached ₹612 from ₹527 in the previous quarter. According to the company, nearly 28% of its 11.1 million monthly transacting consumers now use the feature.
Through the feature, Swiggy and Zepto aim to become the mainstay for planned purchases, mirroring the convenience and value of modern retail giants like D-Mart that drive monthly stock-up habits. Moreover, stiff competition from market leader Blinkit—whose average order value exceeds its rivals at ₹670—is pushing them to win more consumers fast.
'This confirms our belief that as quick-commerce becomes more well-entrenched and goes deeper into the pop [population] strata, providing cart-level value (without significant and perpetual subsidies) is a key lever for sustainably opening up the market further by building habits for stock-up purchases," Swiggy said in its letter to shareholders on Thursday.
However, the moves can cause significant pressure as firms need to compromise margins to fuel discounts, ultimately denting profitability.
An HSBC report from March said these value-oriented programmes can squeeze Ebitda margins from 6% to 3%. Moreover, Blinkit's positioning as a premium convenience-led app instead of a value-led app will help it maintain market leadership, the report added.
'We can expect Swiggy and Zepto to spend more money on this feature in the next 2-4 quarters to counter intensifying competition. They want to create a perception that the experience they provide is similar to a modern retailer. Blinkit, on the other hand, is maintaining consistent service and pricing across geographies even without a loyalty program," said Datum Intelligence's Meena.