BENGALURU: IPO-bound Zepto is increasingly relying on advertising revenue from consumer brands on its platform to offset lower merchant commissions and keep product prices competitive, in a sign retail media could emerge as a key growth lever in the cash-intensive quick-commerce business.
Zepto’s advertising revenue rose to ₹1,636 crore in FY26, up 151% from FY25. By comparison, revenue from operations grew 104% during the same period to ₹22,624 crore, while order volume increased 93% to 640 million. Advertising accounted for more than 7% of Zepto’s operating revenue in FY26, up from about 6% a year earlier, Mint’s analysis of Zepto’s updated draft filings for an initial public offering (IPO) showed.
Since the beginning of FY26, Zepto has kept gross profit as a percentage of net receivables value (NRV) within a narrow range even as prices and delivery fees improved for customers, by offsetting commission reductions with higher advertising revenue, the document showed.
NRV is Zepto’s measure of the total value generated on its platform, including product sales, customer fees, subscription revenue and advertising income. Rival Blinkit uses net order value (NOV), which largely reflects the value of products sold after discounts, while Instamart reports gross order value (GOV), or the total value of goods sold on its platform.
Advertising is becoming a crucial revenue stream for quick-commerce companies as they seek to improve profitability while keeping prices competitive. Ad revenue for the top quick commerce firms is projected to rise to ₹4,900 crore at the end of 2026 from ₹3,000 crore in 2025, according to estimates by market research firm Datum Intelligence.
India’s retail media market is expected to reach ₹30,360 crore in 2026, making up 15% of the country’s ₹2 trillion ad market, according to data by WPP Media.
“Every search for milk, snacks or personal care products on a quick commerce platform creates an opportunity for brands to influence consumer purchases through sponsored placements and search advertising,” said Satish Meena, analyst at Datum Intelligence.
However, it doesn’t solve the bigger challenge of overall profitability, according to Meena. “Advertising revenue is a useful lever, but it only goes so far. Zepto’s losses are still substantial, and no amount of advertising can replace a sustainable core business model.”
Zepto's FY26 adjusted Ebitda loss stood at ₹5,042 crore, compared with an adjusted Ebitda loss of ₹3,511 crore for Swiggy Instamart and ₹277 crore for Eternal-owned Blinkit, according to company filings and investor disclosures.
While adjusted earnings earnings before interest, taxes, depreciation, and amortization (Ebitda) definitions vary slightly across companies, the metric is widely used by internet businesses to assess operating performance before financing, accounting and non-cash costs.
Blinkit and Swiggy Instamart have so far not disclosed ad revenue figures.
Zepto is seeking to raise up to ₹8,010 crore through a fresh issue of shares in its IPO, while existing investors will sell up to 113.5 million shares through an offer for sale (OFS). The selling shareholders include Nexus Ventures Holdings, Contrary ZEP Holdings, Razor Ventures Zepto, Kaiser Foundation Hospitals and Kaiser Permanente Group Trust. Zepto’s founders and promoter group will not participate in the OFS.
Brands fuel growth
About 2,468 brand partners used Zepto’s advertising services in FY26. The company attributed the growth to an in-house advertising platform that offers features such as cost-per-click bidding, automated campaign management, keyword suggestions, and consumer insights.
Zepto’s customer acquisition engine also appears to have become more efficient. Advertising and promotional expenses rose 17% year-on-year in FY26 to ₹1,389 crore, significantly slower than revenue growth. As a result, advertising expenses as a percentage of revenue fell to 6.1% from 10.6% a year earlier, according to Mint’s analysis, showing that the company is generating greater operating leverage even as it continues to grow aggressively.
Zepto’s advertising push is also being supported by a productive dark-store network.
The firm processed about 640 million orders in FY26, compared with Blinkit's roughly 917 million and 412 million for Instamart, according to Eternal and Swiggy’s FY26 investor presentations.
Zepto ended FY26 with 1,139 dark stores, compared with around 2,400-plus stores for Blinkit and more than 1,100 for Instamart. That translates into roughly 5.6 lakh orders per store annually for Zepto, significantly higher than Blinkit’s approximately 3.7 lakh orders and Instamart’s roughly 3.6 lakh orders, showing that Zepto is generating higher throughput from each location than its larger rivals.
However, the comparison is not entirely like-for-like, as Blinkit operates an inventory model while Zepto reports several metrics using its NRV framework.
“The challenge for Zepto is that, unlike rivals with other established businesses, it doesn’t have a fallback," said Datum’s Meena. “Blinkit’s parent Eternal has food delivery, Hyperpure, and District, while Instamart is part of Swiggy’s broader ecosystem. Zepto’s path to profitability will rely almost entirely on making its core quick commerce business work.”
