Zepto’s Rs 1,000 cr ad revenue signals booming retail media ad biz

Quick commerce company Zepto crossed Rs 1,000 crore in annualised advertising revenue, amounting to Rs 83 crore per month, CEO and co-founder Aadit Palicha shared in a LinkedIn post this week. These numbers serve to highlight the increasing significance of retail media advertising for brands. 

According to a Statista report, the revenue from advertising for the online retail market exceeded $1 billion (approx. Rs 80,470 crore) in the financial year 2023 in India. Compared to the advertising revenue in the financial year 2021, this increase was twofold.

Moreover, GroupM's 2024 Global Mid-Year Forecast says retail media remains the fastest-growing segment of digital. It forecasts that globally it will witness 17.5% growth in 2024 and 13.5% growth in 2025.

Zepto launched its ad business less than three years ago. Last week, Zepto launched Jarvis, an in-house ad platform for brands and sellers. It helps small and large brands increase brand salience and platform sales by running optimised and focused campaigns for Zepto’s users.

Quick commerce platforms are increasingly ramping up their ad business to rake in additional revenue from advertising. For instance, Blinkit reported a nearly fourfold jump in ad revenue to more than Rs 400 crore for 2023-24. Reports suggest its ad revenue will also cross Rs 1,000 crore this financial year.

Swiggy, in its initial public offering prospectus, stated that it plans to increase the contribution of advertising revenue further by enhancing its advertising tools such that its partners can continue to leverage its integrated platform to run unique and customised advertising campaigns, which are backed by rich insights and analytics.

Speaking to afaqs! for an earlier story, Kiran Giradkar, CMO, BN Group, an edible oil company, said it plans to spend 20% of its total marketing budget on quick commerce. Similarly, HRX by Hrithik Roshan spends over 60-70% of its budget on retail media advertising. This amount is largely allocated to its e-commerce partner Myntra.

Even e-commerce players are betting big on ad revenue. According to an ET report, Amazon Seller Services, Amazon’s Indian marketplace arm, earned a revenue of Rs 6,649 crore in 2023-24. This marks a 24% increase in revenue from Rs 5,380 crore in the previous fiscal year. Meanwhile, Walmart’s Flipkart Internet reached Rs 4,972 crore, witnessing a 50% surge in advertising revenue compared to Rs 3,325 crore in the previous year.

Sahiba Sachdev, VP, media planning and buying, Interactive Avenues, earlier said to afaqs! that marketers no longer see e-commerce, quick-commerce, and food delivery platforms as advertising opportunities solely for brands present on these platforms. Users interact with these apps daily—whether to place orders or track deliveries—creating a level of engagement akin to gaming addiction. These platforms remain relatively uncluttered, offering better ad placements and engaging users during highly "mindful" moments.

As brands are increasing their ad spends on retail media, different mediums are emerging as ad platforms. Digital entities across categories are opening up their platforms for advertising. In 2022, Uber launched its ads division to offer a variety of ad formats. In August 2024, Uber announced that its advertising business reached a net revenue annual run rate of $1 billion globally.