TLDR;
This video talks about how restaurants in Tamil Nadu are moving away from big food delivery apps like Swiggy and Zomato and choosing a local alternative called Zaros. This shift is happening because restaurants are unhappy with the high commissions, unilateral discounts, and lack of clear communication from the bigger platforms. Zaros offers a subscription-based model, which is proving to be more cost-effective and transparent for these restaurants.
- Restaurants in Tamil Nadu are switching from Swiggy and Zomato to Zaros due to high commissions and unfair practices.
- Zaros offers a subscription model that saves restaurants money and provides better support.
- The success of Zaros hinges on its ability to maintain reliability, manage logistics, and retain customers and drivers.
Introduction: Food Delivery Shakeup in Tamil Nadu [0:00]
The video begins by highlighting a significant shift in Tamil Nadu's food delivery landscape. Restaurants in smaller towns are ditching major players like Swiggy and Zomato in favour of a local app called Zaros. This move raises questions about the reasons behind this migration and whether it signals a broader change in the state's food delivery dynamics. The presenter sets the stage to explore this disruption and its potential implications.
The Grievances Against Swiggy and Zomato [0:43]
Many restaurants in Namakkal and Karur districts have stopped using Swiggy and Zomato because of high commissions (up to 35% plus GST) and unilateral discounts that the platforms announce without consulting the restaurants. These practices make it difficult for local eateries to stay profitable, forcing them to raise prices, which in turn drives away customers. Some restaurants were even forced to shut down due to monthly bills reaching ₹2-3 lakh. The lack of transparency and control over pricing also contributed to the dissatisfaction among restaurant owners.
Zaros: The Local Disruptor [2:08]
Zaros, founded by Ram Prasad from Tamil Nadu, is changing the game by offering a subscription model instead of taking a commission on each order. Bigger restaurants pay ₹3,000 a month plus GST, while smaller eateries pay ₹1,500 plus GST. Zaros also supports its delivery staff by providing electric bikes and reimbursing ₹2 per kilometer for those using petrol vehicles. Currently, Zaros operates in over 50 towns, working with nearly 5,000 vendors and serving more than 8 lakh customers, also delivering groceries and parcels.
Impact and Potential Expansion [3:04]
Restaurants are reportedly saving up to 90% on their food delivery expenses by switching to Zaros. For example, in Namakkal, the price of two idlies has dropped from ₹45-50 on Swiggy to just ₹30 on Zaros. The Tamil Nadu Hotel Owners Association President has indicated that restaurants across the state might follow suit and move to Zaros.
Challenges and Historical Context [3:37]
The video questions whether Zaros can succeed where others have failed, referencing past attempts by restaurant associations to create their own apps, such as Razzo in Kerala, which collapsed due to rapid expansion. Similarly, a boycott of Swiggy in Andhra Pradesh was quickly withdrawn after talks. The pattern shows that while frustration with major platforms is widespread, alternatives often struggle due to issues of scale, logistics, and funding.
Lessons from Other Industries [4:21]
The video draws parallels with the cab aggregator space, where companies like Uber and Ola dominate despite numerous attempts by smaller apps to offer fairer alternatives. These smaller apps often struggle with scale, app experience, and customer loyalty. Zaros will face similar challenges in logistics, customer acquisition, driver retention, and platform reliability.
The Core of the Issue and Future Outlook [5:06]
The shift in Tamil Nadu is described as a grassroots rebellion against tech-driven centralization, emphasizing ownership, transparency, and control. While Zaros may lack the resources of larger platforms, it has local trust, which is crucial in smaller towns. For Zaros to succeed long-term, it must remain lean, reliable, and responsive. The big players may need to listen more and take these signals seriously, as this movement could spread across the state and potentially India. The video concludes by emphasizing that it is a time to wait and watch how the business unfolds.