Milkbasket is gaining strong traction on its ‘online mom & pop store’ model, which has huge upside potential in India in the coming years
Indians have a basic habit of getting fresh milk delivered home every morning. India’s first and largest micro delivery firm Milkbasket promises that and much more, and that too before 7:00 am every morning.
The service, which is available through their website and mobile apps, was started in early 2015 by Anant Goel (former Infosys executive), Ashish Goel, Anurag Jain and Yatish Talavadia. The model may seem similar to startups like Bigbasket and Grofers. But these players follow the hypermarket model, while Milkbasket positions itself as the online version of the local mom & pop store.
Milkbasket provides need fulfillment for top-ups, which are high frequency, low volume needs that are fulfilled by the local stores. The company has carefully steered clear of a subscription-based model.
CEO Anant Goel comments to TechCircle, “In India, and even outside India, ordering grocery is more a wish-based and on-demand fulfillment process. Subscriptions restrict you as a consumer.”
The company has over 5,000 SKUs, which are more than general mom & pop stores but lower than that of a hypermarket. Their inventory is divided into three categories – products they stock, products they fulfil as a marketplace and live fulfillment. Milkbasket plans to continue in the top-up category, and Goel claims that their wallet share per household is the highest in the space.
Users have to register with basic details and can opt for cash or wallet payments. They can then set their orders for the next day any time until midnight. Then Milkbasket’s delivery team will ensure that the products are placed outside your doorstep every day before 7:00 am.
The most notable innovations by Milkbasket in this space are contactless delivery and flexi ordering. The app has add-on convenience features like vacation time off, expense monitoring and management and setting up of repeat and daily deliveries.
Supply chain in this business model is a different ball game altogether, wherein the company has ensured that it controls the entire value chain from procurement to delivery. This ensures the maintenance of tight service standards while also providing free delivery.
The company started with 22 orders a day and currently fulfils over 11,000 orders daily. It has received funding of around US$ 16 million from Mayfield Advisors, Beenext, Kalaari Capital, Unilever Ventures, Lenovo and Blume Ventures.
After initial success in NCR, Milkbasket is now bracing to take its service across to the Silicon Valley of India i.e. Bengaluru. Towards fulfillment of its expansion plans, the company is looking to hire 2,500 people over the next two years for ground staff as well as corporate office. It already has a staff strength of around 1,500 people.
The Indian online grocery market is projected to reach US$ 40 million by FY 2019 according to Goldman Sachs. The top-up model focuses mostly on perishables and accounts for 96% of the grocery space according to estimates.
While a lot of players have gone the hypermarket route, Milkbasket has identified a lucrative business opportunity as an online ‘mom & pop store’. It syncs well with the grocery purchase habits of Indians in particular and promises enormous potential in the coming years.