Mint Explainer: What does Zepto’s Swap & Save mean for brands' relationship with quick commerce platforms?

The 10-minute delivery pioneer is suggesting cheaper options to its customers when they review their cart total, the most price-sensitive point in the quick-commerce business. 

But why would a platform whose profits almost exclusively depend on the order value deliberately encourage its customers to spend less?

That's the million-dollar question that has baffled everyone, from consumers to direct-to-customer (D2C) brand owners. 

Mint explains how Zepto's adventurism impacts margins, inventory management, advertising revenue, and its behaviour towards brands.

What might Zepto be eyeing with the experiment?

The move's one apparent incentive could be savings on opportunity cost. Slow-moving products occupy valuable dark store and display space, and if they are unsold, that translates into even bigger losses. 

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Since most quick-commerce platforms deal with perishable goods, it becomes even more crucial for them to push near-expiry items. 

In this context, Zepto's move can be an effective way to move unsold, slow-moving, or near-expiry inventory, without resorting to blunt discounts or wasteful markdowns.

“Near-expiry products can be cleared faster through smart swap incentives. And for overstocked items, instead of blanket discounts, platforms can push them contextually, right when the shopper is most likely to convert. It’s not unlike your local kirana guy placing the bread within easy reach so you instinctively pick it up," said an industry executive working within the quick-commerce ecosystem on the condition of anonymity.

However, Zepto claims the notion is misplaced. “We designed Swap and Save keeping customers in mind, and how we can add value to their customer journey. At the point of purchase, where customers' price sensitivity is highest, this feature finds a similar product from our assortment that serves their need and helps them save money," it told Mint.

“It also helps shape user behaviour through personalised swap recommendations. It builds on our broader vision to make Zepto the go-to platform for customers' varying preferences and budgets," it added.

In that case, it can help build trust—a rare currency in e-commerce.

“When an app actively helps users save money, it builds trust. Customers start to feel like they’re in a safe space, where the platform is on their side," said Madhav Kasturia, founder and chief executive of Zippee, a quick-commerce logistics platform.

So far, so good, but here's the catch: 

While the feature may help build user trust, it poses a challenge for profitability in the high-cash-burn business.

A successful swap could reduce the average order value (AOV). In a category like groceries, where net margins often hover around 10%, even a modest dip in AOV can cut gross margin per order by nearly half, according to industry analysts.

“Let’s say your cart total is ₹1,000, and you swap an item to save ₹50—your new total is ₹950. You’ve saved money, but Zepto now earns less. With thin grocery margins, say 10%, they just lost ₹5 in profit. But if the swapped-in brand paid Zepto ₹10 to appear in that spot, like a subtle ad, then Zepto actually ends up ₹5 ahead. It’s a small loss on order value, offset by ad revenue," said a retail analyst tracking quick commerce on the condition of anonymity.

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Zepto might earn through ad revenue, but that’s often just ~1% of order value. So, the math doesn’t always add up, the analyst added.

“Platforms are laser-focused on increasing AOV because it has a direct waterfall effect on improving margins—your margin per order goes up, your burn per order goes down," said Kasturia, adding that it hurts both brand growth and platform economics.

Zepto can also use the trick to push its own labels over other brands. 

How are brands taking it?

Clearly, the move hasn't gone down well with D2C brands, especially premium brands that invest heavily in product discovery. 

“The brand has a customer ready to buy, and loses them to a cheaper alternative. The brand didn’t ask to be swapped out—it just lost a sale due to the platform behaviour," said an executive at a D2C brand on the condition of anonymity.

“We invest heavily to move a customer from impression to cart—and then the platform steps in and pushes a competing brand at the last moment. It not only undermines our efforts but also chips away at our visibility and weakens brand perception, especially when we have no say in these final-mile substitutions," said a D2C founder on the condition of anonymity.

The practice will likely turn into monetised placements, which could dilute user trust over time. Brands will need to either offer better margins to Zepto or pay to be featured as the suggested swap, said another industry analyst on the condition of anonymity. 

The shift could even push brands to direct delivery channels to secure customers and reduce the risk of losing them at the crucial last click.

“In the last six months, brands have doubled down on D2C, realising that despite heavy investment in quick commerce, the returns don’t follow. Top-line sales may grow, but bottom-line profits rarely scale," said Kasturia.

Is it a dark pattern?

E-commerce sites are known to use the most dark patterns, followed by quick commerce, travel booking, payments, and gaming platforms, according to a 2024 report by the Advanced Study Institute of Asia (ASIA).

“They keep adding samples, constantly tweaking the cart. That could be a dark pattern, and there are quite a few of those everywhere on all platforms," said the first retail analyst mentioned in the story.

To be sure, a dark pattern refers to a deceptive or manipulative user interface design tactic that tricks users into actions they didn't intend to take, often designed to benefit the company or platform.

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“Zepto says it’s stock-based, not an ad, but the timing and framing still give it power. It uses the language of savings while obscuring the commercial logic, from inventory clearance to potential private-label promotion," said Farheen Yousuf, a behavioural economist from ASIA.

“This affects users who lack price memory and also quietly displaces competing brands," she said, adding that it could be a dark pattern, especially if the swap lacks a clear comparison, hides commercial intent, or doesn’t disclose how the suggested product differs in quality or value.

It’s not the nudge that’s the problem, but who controls the environment in which choices are made, questioned Yousuf. “As more platforms adopt such designs, we may need to rethink what fair competition and informed choice look like in digital marketplaces".