AT A TIME when hyperlocal e-grocers LocalBanya and Peppertap were collapsing under the weight of heavy discounts, micro-delivery grocery platform Milkbasket which started operations in March 2015 was learning to survive. Even as bigger players Grofers and BigBasket pivoted to a comparatively sustainable model, Milkbasket had adopted a unique delivery model. That model, it claims, helped it achieve positive unit economics within six months of operations. Unlike most e-commerce companies, Milkbasket only delivers between 4-7 AM. It accepts orders till 12 midnight and clocks a turnaround time of 4.5-5 hours. The start-up has been utilising Gurugram’s idle workforce in the early hours of the morning, thus keeping the average cost per delivery at Rs 5. Altogether, it has an in-house logistics team of 50 part-time and 70 full-time delivery boys. Anant Goel, co-founder and CEO of Milkbasket, insists that grocery services has to be done at a cost which can justify the scalability and sustainability of the business model.
Under hybrid sourcing, it uses statistical forecasting to keep stocks of daily essentials like milk and bread in its inventory and sources remaining on-demand through a hyperlocal approach. With operations in Gurugram, MilkBasket is servicing 115 housing societies in Golf Course Road, Golf Course Road Extension, Sohna Road, Unitech Nirvana Country, and Phase 5, which together offer it a virtually captive market. It seeks to increase the number of households to 15,000 by end of 2017 from 8,000 currently. Milkbasket operates a 15,000 square feet facility that serves as sorting hub. “Each hub can cater to about 10,000 households per day which are within a 15-km radius,” says Goel.
Milkbasket delivers around 20 orders per month to every household, which can fetch monthly average order value of Rs 3,500. A major chunk of its revenue is from the 10-15% margin it makes on the grocery items. Currently 2% of revenue is from advertising and Goel seeks to increase the share to 4% in a year. In August 2016, Milkbasket raised $500,000 in seed funding led by EVC Ventures and investors such as Zhu Dao Investments. This month, it closed pre-Series A funding led by Blume Ventures and Lenovo Capital. The start-up is looking at raising a new fund of $8-10 million. “Every year Rs 7000 crore is spent on buying groceries in Gurgaon. We are barely scratching the surface and grocery shopping is a local catchment area phenomenon,” he adds.