June 7, 2018
Kishore Biyani’s Future Group will be soon delivering milk, eggs and bread at the doorstep every morning, taking the fight straight to hyper-local milk-delivery firms such as Milk Basket, SuprDaily and the local milkmen.
Around 1,000 outlets under the Easyday, Nilgiris and Heritage brands of India’s largest retailer are getting ready to deliver milk directly to homes in the morning. The service will be launched in metro cities and expanded to other parts later. Other essentials like fruits, vegetables and grocery will be added to the cart in the coming months, once this model sets up. This new initiative of home delivery could generate around Rs. 20 lakh per store per month of additional revenue, Biyani said.
Consumers can place orders through a mobile app, Easyday and other outlets will deliver the items within a 2-3 kilometre radius. The milk delivery space has been witnessing a lot of attention lately from investors as well as ecommerce companies looking to acquire them.
For Biyani, delivering milk and eggs is part of a bigger plan. The Future Group plans to open about 10,000 small stores in the coming years as part of a strategy to increase revenue from Rs.5,000 crore to Rs. 60,000 crore. Milk delivery could provide these stores an extra source of income. Membership costs Rs. 999 a year and offers an about 10% discount on purchases.
Online food-delivery company Swiggy, which is looking to start a grocery-delivery business, is in early talks to acquire subscription-based milk-delivery startup Supr Daily. Alibaba-backed Big-Basket has held buyout talks with Pune-based RainCan, Gurugram-based Milk Basket and Bengaluru-based Daily Ninja. According to RedSeer Consulting, online milk delivery is an addressable market of $1.2 billion (Rs 8,000 crore). Even though delivering milk is a thin-margin business, it offers companies the opportunity to push other high margin categories along with milk to consumers, it said.