Paniyaram to paracetamol: Zaaroz delivers it big in 36 small towns

Chennai: When every other business enterprise was complaining about lost businesses due to the Covid-19 pandemic, this one based out of Chidambaram has been expanding.
Zaaroz, a hyperlocal delivery startup founded by two childhood friends from Chidambaram – Ram Prasath V T and Jayasimhan V – in 2018, with a seed capital of ₹ ` 30 lakh, has converted the lockdown challenge into an opportunity.It started off in Chidambaram as a food delivery app and soon started delivering medicines, groceries, fruits, vegetables, meat and stationery.
Within three years, it expanded its operations to 36 tier-2 and tier-3 towns, from Panruti to Kovilpatti and Karaikal to Thuckalay. With more than 2,000 merchant partners on board, the team has delivered more than 13 lakh orders through 400 delivery executives and is aiming to expand to more than 100 locations by 2023. Next: Be a ‘super app’ by providing auto and cab booking services on the same platform.
This was not what the founders had in mind when they floated Maritime Database Services Private Limited in 2018 at Chidambaram. "We went to the same school and, after graduating in engineering, we went to Singapore to work as maritime software engineers," says Ram Prasath.
Prasath worked in 12 countries in the Far East and Southeast Asia for more than a decade before returning to Chidambaram. Jayasimhan continues to operate out of Singapore. "We floated the company in Chidambaram to provide software services for overseas clients. Soon enough, we learned from friends about the need for a delivery service company in small towns. We changed track and floated Zaaroz," says Prasath.
"For seven months, we served only Chidambaram and moved to Kallakurichi in December 2019 and Panruti in February 2020. Then the first lockdown happened. Vishu Mahajan, then sub collector of Chidambaram and a regular user of our app, urged us to expand to other towns as lockdown has restricted movement of people. Soon we were in 15 towns and the second lockdown in 2021 helped us reach 30 towns across the state," says Prasath.
Zaaroz serves customers within a 15 km radius of every town that it expands to. It has come as a boon also for small vendors of products from cold-pressed oil to coffee powder. The company makes money through 15% margin from restaurants and delivery charges for other services.
That brought in a hurdle in the form of cost of delivery. "We managed it in two ways. We charge only ₹40 – ₹50 per delivery up to 10km, which the customer would otherwise spend on commuting.
The company has deployed 40 e-scooters and has placed orders for 160 more. "We acquired the first lot using our profit and may go for a bank loan for acquiring the rest," says Prasath, while adding that they have not thought of raising funds. "We have kept ourselves away from the big cities, where competition from big brothers like Swiggy, Zomato and Dunzo will be high, resulting in higher cash burn. Over the next year or two, we plan to expand to three other states — Karnataka, Andhra Pradesh and Kerala — but will focus only on small towns," he said.
The going is so far good for Zaaroz, but competition is building up here too. Over the past two months, the big players have entered into six of the 36 towns serviced by Zaaroz, like Villupuram. "But there is business for all. We are confident of getting our share of reasonable business from our loyal customers and hope to retain our margins to remain profitable," says Prasath.