The app that delivers smiles to Tamil Nadu’s small towns

In 2018-2019, delivery apps were pretty much absent in Tier II and III towns of Tamil Nadu. That’s not to say there wasn’t demand—projections said there was a sizeable market with incremental growth expectations. And this is exactly what Zaaroz, an all-service delivery app, decided to tap when it launched in the temple town of Chidambaram. But why Chidambaram?

That’s because it was co-founded by two Chidambaram natives who had returned home after a two-decade stint in Singapore. Ram Prasath V.T., and Jayasimhan V.—who engaged in the ERP software development lifecycle during their stint abroad—received a good response from the people of Chidambaram, who took to ordering from the app.

“I had noticed hoardings around the town advertising it as the ‘Namma Ooru App; nambikkayaana app.’ The food arrived within 20 minutes as promised and I was sold,” says S. Parthiban, professor at Annamalai University, Chidambaram, and one of the longest customers of Zaaroz. Curiosity about the app kept building as word of mouth spread. Within a couple of months there was enough traction—so much so that Zaaroz saw the opportunity to expand to Vridachalam. And then the pandemic struck.

Entry into service delivery

The demand for delivery apps rose during the pandemic—especially with the government order reiterating no-contact, online commerce. At the time when user inclination surged, a lot of local apps—one in Pudukottai, two in Karaikkal and one in Theni—got into the fray. But all thanks to its customers, in terms of delivery categories and scale, Zaaroz still had an edge. Around this time, a Zaaroz regular subscribers recommended the app to business owners located in towns in and around Cuddalore. Zaaroz took the lead and expanded its service to 30 towns in the middle of the pandemic. With the demand still building, in the next leg, it reached 20 more towns. “After reaching 50 destinations, we intentionally stopped expanding,” says Prasath.

He breaks into a laugh when asked the meaning of Zaaroz. “The word has no meaning,” says Prasath. “We coined it so that it fits the logo, has six alphabets and good SMS visibility.”

Because both the founders had software expertise comprising development, testing, implementation, and sales, they focussed on strengthening the technology and software before scaling. “Only the software strength can drive scale and growth,” Prasath says. What helped was that though they were journeying on a new, untapped course, it had no competitive players, and they could set a template and trend.

Along with the IT integration, Zaaroz also structured its own business model. From inception, it wanted to be an all-services delivery platform, for food to groceries to fruits to medicines, among others. For starters, Zaaroz adopted the commission-based model—charging 15% for businesses in Tier II towns and 10-12% for those in Tier III towns.

Teething troubles

Propagating the use of the app was tough because digital literacy was just catching up, and it took some time for business owners to align with the workings of Zaaroz. The first task was winning the confidence of brick-and-mortar businesspeople. The challenges were many: most were new to using an app, so tracking notifications for orders and delivering needed to be made feasible. Zaaroz included an automated calling option—the business owners would receive a call whenever an order was placed. Once the process was established, and orders started piling, the owners, especially of restaurants, were ready to collaborate.

Now, the automation is even wider and deeper. “It starts from assigning work to the delivery partners, tele-callers, aligning AI-generated answering options, to importing restaurant menus, consolidation of data, and operations too,” says Prasath. When there are mixed orders—like groceries, fruits, and medicines—the system will categorise it based on location. It will be assigned to a single person for delivery. If there are two orders from the same customer, then it will be assigned to the same person.

The back-end is tinkered with from time to time to address the challenges. And it was only because of the stability of the software while scaling that Zaaroz could be launched in Namakkal in two days flat after the hotel owners’ association decided to log off other delivery apps. “We don’t want to move fast. We want to be consistent, and value-add to the stakeholders,” says Prasath, explaining Zaaroz’s strategy.

Rewriting the rules

Ideally, when a restaurant ties up with a delivery app, it has to pay a commission of 30-40% per month from his revenues. To compensate this expense, the restaurant marks up its prices, transferring the burden to the customers. But even then, all costs pertaining to deliveries aren’t recovered since besides the commission, the app slaps on the cumulative cost of offers, penalties, surcharges, and ad costs on the owner, say industry sources.

Restaurants do get a heads-up about such offers—they are sent an email detailing the charges and are asked to get back if they have any objections within a stipulated time. But since emails aren’t the regular mode of communication in Tier II and III towns, most restaurants would miss these relevant emails and would crib about the hidden costs and loss in revenues.

In fact, while the country’s two leading players in the food delivery space were operational in Tamil Nadu’s small towns, businesses were struggling under the weight of commissions and the other delivery related charges, with some even shutting down, say industry sources.

So, in April 2025, with 50 business establishments enrolled, Zaaroz moved to a monthly subscription model from its commission-based model, charging Rs 3,000 plus GST for big businesses and Rs 1500 plus GST for smaller businesses, irrespective of the number of orders. In effect, a back-of the-envelope calculation finds that it would work out to Rs 150 per day for bigger businesses and Rs 59 per month for small business owners.

But, in exchange, Zaaroz insists on transparency from the owners: zero price mark-up and online listing of the menu. This is a win-win for both customers and restaurant owners and affordable too, says R. Jagadish Kumar, owner of Dolphin restaurant in Tiruchengode. “The percentage of profit is better. On an average, per month, we get 1,250 orders through Zaaroz,” he says. As a result, “The scale that was supposed to be reached in six months was reached within two months,” says Prasath.

How it’s different

For any technology-led operation, making a striking difference in the market does not happen immediately. Because all integrations and upgrades happen behind the scenes and it could make customer experience either better or worse. “To eliminate this, we opted for an easy-to-use app design, with clear routing without too many branch-offs or detours. And we kept adding new features such as self-pick-up and scheduling to broaden and address varied customer requirements,” says Prasath.

Using the self-pick-up feature, the customer can place the order, and the restaurant will mark the time for pick-up. The customer can go and pick up the order herself. Then there’s scheduling, which makes it convenient for customers ordering from another location for their loved ones back home. From breakfasts to birthday cakes to milk deliveries, many regular products get scheduled on Zaaroz.

To this day, Prasath does not harbour any regret for launching Zaaroz without doing any market research or being armed with user data. He says that the pandemic made the space a level playing field for all players, who had to go back to the drawing board. “We are open for change and ready to go the extra mile. In this business, the practice is to offload the operational burden to one of the three stakeholders viz. delivery partners, users, or business owners. We envision sustainability not just for us but for each stakeholder involved,” he tells Fortune India.

Zaaroz’s current business model is evolving to suit the needs of the market and customers. Since operations in rural locations depends on the local culture and milieu, a different SOP for each location is worked out. Similarly, the marketing strategies and modes are also different for separate locations.

The heart of the ops

“Manpower is the most challenging [thing] in the operations-intensive, service delivery industry,” says Prasath. At Zaaroz, the delivery fleet consists of e-bikes, so there is no fuel cost and less expense on vehicle maintenance. Since the drop locations are usually within 500 metres and the sizes of packages are not too big to carry, so there is no chance for loss or damage or even delay during delivery, says U. Vignesh, a delivery partner for Zaaroz. “At least Rs 700-800 per day earnings are guaranteed and if we work for 12 hours straight, I can easily make sizeable earnings in a month,” he says.

“Price sensitive customers choose Zaaroz over others,” says Prasath when asked about competition.

Moving ahead, with a view to make the 360° offerings, Zaaroz has started cost-effective B2B procurement and delivery of FMCG products to restaurants and kirana stores. After two years of profitability, Zaaroz has been in the red in the past two years since the brand is on expansion mode and attempting end to end integration. Prasath claims only experience has helped him and his partner to ride through the current trend, troubleshoot and prepare for the next two years of growth with expansion across Tier II, III and IV towns in Tamil Nadu and new models of revenue generation models in the next few years. Zaaroz also plans to raise funds and go in for an IPO after that moving into Tier I and metro cities. Though he is collating data and using it to improve the functionality of the app as of now, Prasath is yet to make data-influenced decisions for revenue generation or brand building.

“We want to operate with an ethical code that we aspire to communicate to everyone across the value chain. In the satisfaction of our delivery fleet and our business owners and customers lie our true success,” says a beaming Prasath, spelling out Zaaroz’s mantra.