This Gurugram-based Startup Is Replacing Daily Kirana Shopping With Its Digital Platform
Hyperlocal grocery startup Milkbasket in June raised $5.5 million in Series B round led by Inflection Point Ventures
How many times has it happened that after a long tiring day when you enter the house, you are greeted with an annoyed face because you forgot to collect grocery items that were repeatedly reminded to you? Yes, you are not alone, and it happens in almost every household in India.
Left with no choice, you go out again to get those essential products or else, the next day you have to go to the market first and then to the office.
The concerned products here are often dairy related which are not advisable to stock up.
To address this day-to-day problem, a Gurugram-based startup started delivering essential products as early as 4 AM.
In an interaction with Entrepreneur India, Anant Goel, co-founder and chief executive officer of Milkbasket, talks about how they created a third grocery delivery model and have fulfilled delivery even during the ongoing pandemic.
“Beta kal kya khana hain? (Child, what do you want to eat tomorrow?)—a simple yet recurring question that was at the crux behind the foundation of Milkbasket.
Goel who worked as a consultant and stayed most of his life outside India took a sabbatical in 2011. After trying his luck with several other startups, Goel in 2015 along with his three friends—Ashish Goel, Anurag Jain, and Yatish Talvadia—founded Milkbasket.
“For tomorrow’s meal, Indians will plan it today somewhere between 7 PM and 10 PM,” said Goel.
He said the idea was to deliver essential grocery products before 7 AM in an easy, contactless and prepaid manner.
He said though online grocery operators have grown every year in growth merchandise value (GMV) and sales, they have failed to make profits. According to Goel, Milkbasket took inspiration from the age-old newspaper supply chain. “We closely observed the newspaper supply chain that made profits at such low cost and built our unique supply chain,” he added.
Before setting up the startup, the four co-founders interacted with various grocery store owners to understand customer patterns. “We found that milk was not a profitable business. However, store owners kept them to attract customers to sell other products along with milk,” he added.
“This was the key reason behind naming the startup Milkbasket. You will get milk along with essential products in a basket.”
Online Replacement For Daily Kirana Store
According to Goel, Milkbasket provides advanced grocery shopping without disturbing its customers. Goel believes there are multiple hyperlocal online grocery players in the market. However, none seemed efficient and failed to understand the Indian mentality in grocery shopping.
“We do not have any minimum order amount. You can either buy an INR 5 biscuit packet or go for INR 10,000 worth of products. In both cases, the products will be delivered the next day before 7 AM. This is how we have operated,” added Goel with a sense of pride.
From low self-life products such as milk, fish, and fruits to daily essentials such as wheat, rice, and pulses—Milkbasket fulfils households’ complete grocery requirements.
Blume Ventures-backed Milkbasket partners with various brands and stores its product in five warehouses across the country. Once an order is placed, the startup through its last-mile delivery partners delivers the product from 4 AM.
Milkbasket currently operates in Delhi, Gurgaon, Ghaziabad, Noida, Bangalore and Hyderabad.
Started with 100 products, the startup now has over 9,000 products on its platform and has active users of 150,000 families across the country.
The startup daily delivers 80,000 litres of milk and 100,000 kg of vegetables and fruits. In June, Milkbasket raised $5.5 million in Series B round led by Inflection Point Ventures to scale up business operations.
COVID Impact: Two Important Calls
Though the pandemic has negatively impacted businesses across sectors, online grocery grew at a booming pace riding on the back of limited restrictions. According to a Forrester Research, India’s online grocery could make $3 billion in sales this year, which is 76 per cent more than last year, thus attracting new players like Reliance’s JioMart.
During the initial period when the lockdown was first imposed to curb the spread of the virus, Milkbasket witnessed a surge of 200-300 per cent in order volume from its customers. At a time to acquire customers, Milkbasket took two important calls that helped them to tide over this crisis.
“We stopped onboarding new customers. For us, it was important to serve our existing customers and make sure their requirements are fulfilled,” added Goel.
To prevent its customer from hoarding products and ensuring that all its active users get their fair share, the hyperlocal startup capped a limit on each product for a family.
He said in the initial days, the startup grappled with delivering due to lack of workforce. However, with the Unlock phase, Milkbasket has even started delivering in the containment zones and is onboarding new customers again.
The company has recently reported a profitable first quarter of FY20-21 with positive earnings before interest, taxes, depreciation, and amortization (EBITDA). The company has already achieved its revenue generation target of $7.5 million monthly that was set for October and November and is now setting target month on month basis.
Though at present Milkbasket will not expand its operations in other cities in future, Goel said he might look into Chennai, Mumbai, Pune, and Kolkata. “We get a lot of queries from these cities through our friends and business associates,” he added.
Goel believes that if Milkbasket continues to report positive EBITDA, then the firm without further capital infusion can go for an initial public offering in the next couple of years.