Zepto Faces User Decline Amid Rising Marketing Costs

Zepto's User Base Decline and Financial Overview

In a surprising turn, quick commerce company Zepto has reported a drop in its user base for the first time as of March 2026, despite escalating marketing expenditures. The number of annual transacting users fell from 49.54 million in the December 2025 quarter to 47.97 million by March 2026. This decline occurred even with significant advertising investments and an overall increase in marketing budgets.

Zepto's net loss for the fiscal year 2025-26 widened to Rs 5,905.19 crore, compared to a loss of Rs 4,699.71 crore in the previous year. Nevertheless, the company's operational revenue more than doubled, reaching Rs 22,623.58 crore in FY26, up from Rs 11,109.94 crore in FY25. For the quarter ending March 31, 2026, Zepto managed to reduce its net loss to Rs 1,538.67 crore, down from Rs 1,831.91 crore in Q4 FY25.

This financial information was revealed in the updated draft red herring prospectus submitted to SEBI, as Zepto aims to raise Rs 8,010 crore through a new share issue as part of its upcoming IPO. Additionally, an Offer for Sale (OFS) of 11.35 crore equity shares by current shareholders is anticipated, bringing the total issue size to approximately Rs 11,000 crore.

Zepto has previously indicated that its operational dependencies are a significant aspect of its risk profile. The company emphasized that its delivery model heavily relies on the location and density of its dark store network. They noted, "Our inability to manage and expand our dark store network in a cost-effective manner could negatively affect our business, financial health, cash flows, and operational results." Experts suggest that the quick commerce sector is becoming increasingly costly and competitive, with a focus on enhancing order frequency and customer retention.