Prozo records significant rise in demand for warehouses: CEO Ashvini Jakhar

With a lot of SMEs and enterprises having shifted their focus from being 100% offline to online, Prozo is experiencing a significant rise in demand for pay-per-use, flexible warehouses. Prozo is a full-stack Cloud supply chain company offering end-to-end supply chain services on a pay-per-use basis to SMEs, D2C brands and enterprises.

In an exclusive interaction with Ashvini Jakhar, Founder and CEO, Prozo, MyBigPlunge discusses how the company has transformed in the post-COVID world:

What is Prozo about?

Prozo is a full-stack Cloud supply chain company offering end-to-end supply chain services on a pay-per-use basis to SMEs, D2C brands and enterprises. The company’s services include a pan-India warehousing, fulfilment and freight network to enable ‘1-2-day deliveries’, supply chain technology and distribution on 20+ e-commerce platforms. All inventory sold via Prozo comes with fast fulfilment badges akin to Amazon Prime and Flipkart. Prozo’s proprietary ‘ProInsights platform’ offers brands clear, actionable insights around intelligent inventory placement, online discoverability, out of stock rates etc., to enhance their online presence and revenue. Prozo is akin to ‘middleware’ b/w brands and demand platforms. Brands working with Prozo no longer need to deal with multiple warehousing partners, freight providers, technology systems (warehouse, order, and transport management) and online distributors.

How has the company evolved or transformed over the years into the post-COVID world?

For the past few years, commerce has been gradually moving online. Rising internet penetration and smartphone usage, an enabling online payments and logistics infrastructure and favorable demographics were the key drivers of this trend. The Covid-19 pandemic was a catalyst and further accelerated the shift to online commerce. Due to this, a large number of D2C brands are emerging. Also, a lot of SMEs and enterprises shifted their focus from being 100% offline, b2b focused to operating in a truly omni-channel manner, serving both online and offline customers. Prozo is experiencing a significant rise in demand for pay-per-use, flexible warehouses. Brands want to store their goods closer to the customer, to enable ‘1-2-day’ deliveries. Moreover, they want insights to optimize their inventory stocking points to minimize storage and shipping costs. As a company, Prozo has expanded its geographic footprint and technology stack to cater to this ever-growing demand. The company’s warehousing, fulfilment and freight vertical is on track to grow 10x this year.

How has access to supply chain and logistics democratized over the past year?

Most large companies have two different supply chains for offline and online demand channels. For online sales also, brands maintain separate pools of inventory for different e-commerce platforms like Amazon, Flipkart, Nykaa, etc. This increases their inventory holding costs.

For SMEs and D2C brands, having different pools of inventory and establishing their own warehousing and fulfilment network is expensive, requiring heavy upfront investments and a dedicated team of operations specialists. At Prozo, we have been working towards democratizing supply chain access for SMEs and D2C brands, where they can use our end-to- end supply chain services on a pay-per-use basis. For example, a D2C brand that has seen demand from Kolkata and wants to have a presence there can partner with Prozo and get access to warehousing and fulfilment, last-mile delivery and tech solutions like warehouse and order management systems in a plug and play manner, where the brand pays only for the orders we process. Thus, now any SME or D2C brand can have a pan-India presence and store goods closer to its customers to enable a ‘1-2-’ day delivery, without incurring any upfront costs. This allows them to be competitive vis-a-vis their larger, deep pocketed peers.

Small businesses and enterprises have also been hit in terms of shortage or market disturbances in terms of raw materials due to the unprecedented global health crisis as well as lockdowns implemented by countries to stem COVID-19. Were Prozo’s clients also impacted? How did they overcome the challenges?

Though the global supply chains have been disrupted due to covid, our partner brands didn’t see large-scale disruptions on the supply side, given most of their raw materials were sourced from India. A lot of our clients were agile and to deal with repeated lockdowns, shifted their focus to increase sales on e-commerce platforms. Prozo has enabled 300+ companies to sell online. On the back of our technology, partner brands can list 100% of their inventory on e-commerce platforms like Amazon and Flipkart within 48-72 hours. Also, their entire catalogue gets fast badges like Amazon Prime or Flipkart Assured.

What role does Prozo play in terms of the success of SMEs, D2C brands and enterprises?

Prozo helps SMEs, D2C brands and even large enterprises on four key aspects:

• We Integrate fragmented pieces of the supply chain. In today’s ecosystem, brands have to deal with various vendors for a) supply chain technology, b) warehousing, c) freight and d) online distribution. Prozo takes away all of this complexity and provides all these services under one roof.
• We Democratize reach to end customers. Earlier, only large conglomerates could invest to establish a pan-India presence. With Prozo, our clients get access to a pan- India warehousing and fulfilment network on an affordable, pay-per-use commercial model. This enables them to store inventory closest to the customer and serve them in the fastest possible manner.
• We Consolidate fragmented supply chains and inventory. Today, most brands maintain separate supply chains and pools of inventory for B2B and B2C orders, and further split inventory by type of channel: Amazon, Flipkart, Myntra, Nykaa etc.  Prozo allows brands to expose a common pool of inventory to all demand channels, helping them reduce working capital requirement by 15%-30% and overall costs by 5%-10%.
• Prozo helps brands Grow on e-commerce platforms. With the rising number of e-commerce platforms, most brands don’t have the bandwidth and capability to be present on so many channels. Prozo’s technology enables them to expose 100% of their inventory on all e-commerce platforms, along with fast fulfilment badges. Brands working with us have experienced a 2%-5% uptick in revenue because of this. Also, our proprietary platform, ‘ProInsights’ gives real-time, actionable insights like intelligent inventory placement, catalogue quality etc to help brands grow online sales.

How has Prozo changed dynamics in its focus market or sector?

In today’s e-commerce landscape, with 20+ online platforms and rising, demand as well as supply chains are highly fragmented. Organizations need to build adaptive supply chains to meet this fragmented demand. If companies are not able to put in place a dynamic, linear supply chain, it will lead to a sub-optimal customer experience, and thus, a loss in revenue. Our one stop, tech-enabled end-to-end supply chain solutions enable brands to build linear and agile supply chains, and truly offer an Amazon Prime-like fulfilment service to all their customers, be it orders on their own webstore or e-commerce platforms. Brands working with us have experienced a 15%-30% reduction in working capital, a 5%-10% reduction in costs and a 2%-5% uptick in revenues, along with 99.9%+ inventory accuracy and 20%+ better SLAs.

Does Prozo plan for expansion?

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 Our warehousing, freight and tech business is on track to grow 10x this year. We have extensive all-round expansion plans. Currently, we are present in Noida, Kolkata, Bhiwandi, Delhi and Hyderabad. Our current warehousing and fulfilment network enables ‘1-2-day’ delivery to 90% pin codes in India. We are now working very closely with third-party warehousing partners in Tier-2 and Tier-3 cities and plan to onboard another 100 brands in the next 1 year.

What is the company’s outlook for 2025?

Four years is a long time for any young company. Logistics and supply chain is a large, fragmented market and there are multiple pain points to be solved. We will continue to focus on our core services of warehousing and fulfilment, freight, distribution and tech and also offer other ancillary services to our clients.  Our warehousing, freight and tech business is on track to grow 10x this year and we expect to grow at an accelerated pace in the years to come.