Online Grocery Startup Milkbasket Raise $7 Mn Series A Round

Competing its rivals in the grocery and milk delivery firms, Kishore Biyani’s Future Group has announced to start morning doorstep delivery of milk, eggs and bread. The existing players in the market are Milk Basket, Supr Daily and the local doodhwalas. 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 in the next two weeks, and expanded to other parts later.

Biyani revealed that other essentials like fruits, vegetables and grocery will be added to the delivery list in the coming months, once it fine-tunes the model. An additional Rs 20 lakh per store per month could be generated by the initiative of home delivery.

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 attracting investors as well as e-commerce companies looking to acquire them.

Swiggy, which is the leading food delivery firm has been attempting to start a grocery-delivery business, is in early talks to acquire subscription-based milk-delivery startup Supr Daily, a financial daily had reported. 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.

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 of growing revenue from smaller format stores to Rs 60,000 crore from about Rs 5,000 crore at present. Milk delivery could provide these stores an extra source of income. Last year, it converted the network of stores it had purchased from Bharti Retail and through some other acquisitions and folded them into membership-based Easyday Club. Membership costs Rs 999 a year and offers an about 10% discount on purchases.

The Mumbai-based retail group plans to dot the country with around 10,000 Easyday stores in the range of 2,500 sq ft, and plans to increase the membership base to about 20 million.

Kroger, has planned to buy Chicago-based meal-kit seller Home Chef for $200 million in order to grab a larger chunk of the online grocery market.

Like other meal-kit firms, Home Chef offers doorstep delivery of recipes to its subscribers. Kroger will pay $200 million for Chicago-based Home Chef, and may pay an additional $500 million over five years provided the sales reach desired milestones. Kroger plans to bring Home Chef kits in its supermarkets.

Competition among meal-kit companies is fierce. Albertsons bought Plated last year, Walmart is expanding its easy-to-make dinners, and meal-kit company Blue Apron started selling some of its kits in Costco stores. Amazon, which bought Whole Foods last year, also sells its own meal kits.

Kroger Co. the 2,800 store brand may close the deal in the second quarter.

Britain’s digital supermarket Ocado has claimed that U.S. retailer Kroger had signed an exclusive deal to incorporate its technology for delivery of groceries.

As per the deal, the U.S. company will acquire 5 percent stake in Ocado, it said on Thursday.

In order to compete with online grocery delivery firms such as BigBasket, Grofers and even larger players like Amazon Now and Amazon Pantry, the country’s biggest retailer, Future Group is launching an e-commerce application for Easyday members, resembling Amazon’s paid subscription service Amazon Prime.

The Kishore Biyani-owned retail chain will cater to the daily and weekly requirements of consumers such as fresh fruits, vegetables, dairy items and others.

“Fruits and vegetables are a great way to get customers frequently. They are daily products. We want the first mover advantage,” said Vinay Bhatia, CEO, group loyalty and analytics, Future Group. “Delivering fresh fruits and vegetables from a central warehouse to customers’ house (which most e-commerce players do at present) is unimaginable,” he added.

The retailer intends to use its neighbour format stores Easyday for delivery. The stores’ service customers within a radius of 2-2.5 kms and the retailer plan to increase its network drastically. Easyday club membership programme charges Rs 999 as an annual membership fee, for which members get 10% discount on all purchases.

The app, which will be launched in the coming weeks, will also offer them the convenience of shopping from their homes. The company at present has more than 950 stores and the target is to take it to 10,000 by 2022. Prior to this, the group has had several unsuccessful attempts at e-commerce, with its first attempt Future Bazaar and Big Bazaar Direct shutting operations. The company had later acquired online furniture retailer FabFurnish to market its brand HomeTown.

Food and grocery account for almost half the overall retail basket in the country. Although online penetration is still less than 1%, it has high growth potential. Morgan Stanley expects the grocery and food delivery market to reach an online penetration rate of 4% by 2020, touching gross merchandise (GMV) of $19 billion, or about Rs 1.2 lakh crore, making it the largest online category after electronics and apparel.

Online food-ordering and delivery company Swiggy is planning to add medicines and hyperlocal groceries into its delivery menu to boost volume on its eponymous platform, three people aware of the development said.

“While several categories have been discussed, they may start with medicines and then move on to groceries,” one of the persons cited earlier said, adding that the Bengaluru-based company is aiming at improving cost optimisation and utilisation of its over-30,000-strong workforce during the lean hours, especially between 2 pm and 6 pm, through this diversification. “They plan to name this service ‘Dash’.” The Naspers-backed company will kickstart pilot operations for some of the new categories in the next few months, the person said.

Without sharing the details of the new development, a spokesperson for the company said, “At Swiggy, we’re continuously experimenting with ways in which we can enrich the lives of our consumers and partners by making it more convenient and hassle-free."

The development comes even as Swiggy is in talks to raise over $200 million from DST Global and hedge fund Coatue Management in a round that will see its valuation cross the $1-billion mark.

As per industry estimates, Swiggy leads the country’s online food-delivery business, handling over 7 million orders every month from around 35,000 restaurants listed on its platform in India. Last month, rival company Zomato claimed that it crossed the 5.5-million order mark across both India and the UAE markets.

The company’s plans to diversify its delivery offering and build a unified delivery platform comes even as Chinese investors in the market, including Meituan-Dianping, Didi Chuxing, and Alibaba (through its payment affiliate Ant Financial), which have backed Swiggy, Ola and Zomato, respectively, have been increasingly focusing on pushing up volumes as they look to recreate China’s on-demand delivery success story in India.

Swiggy’s strategy is clear from its investor Meituan-Dianping's China business model, which offers deliveries and services across a host of categories, including groceries, beauty salon, payments and ride-hailing, even as food remains its highest-frequency delivery category by volume and value. While food delivery is a burgeoning market in China, pegged at $37 billion, most key players including Alibaba-backed Ele.me and Tencent-backed Meituan offers diversified delivery offerings, with food being the main driver.

Low price online grocery supermarket, Grofers has announced its successful growth registering a strong single day sale crossing Rs. 7.8 crore on April 1, 2018, a five-fold growth, as compared to last year.

The brand led a dramatic shift in its customer base with 75 percent women customers as opposed to 69 percent men, over last year. With many firsts starting this financial year, FY 2017-18 led a significant shift in the online grocery shopping trends among Indians.

The shift has led to significant increase in cart size with women accounting for almost 80 percent of the sales on the platform.

With 12 percent of new users on the platform being first-time online buyers, it is interesting to note that affordable data connections are driving the uptake of online shopping amongst women.

Further, Jio has also accelerated the adoption, as a large user base of almost 43 percent comes from users who are using Jio.

"We are proud to register a phenomenal growth and shift in the grocery buying habits of middle-income Indian customers. As we increasingly become a preferred destination for online grocery shopping, we are delighted to notice the shift with women user base forming a larger buyer section leading to strong customer stickiness and increase in cart size," said Albinder Dhindsa, co-founder, and CEO, Grofers.

"This certainly is a testament to providing quality and consistency in the products and experience at our platform. Along with this, we continue to work with a lot of regional brands to help them with better visibility and distribution - falls in line with one of our goals of being able to make small manufacturers 50 percent of the Grofers platform within the next 12 months. As we continue to see the interesting shifts and trends shaping up the future of online grocery shopping, we reinforce our commitment to the growth of the market," Dhindsa added.

Almost 50 percent of the Grofers' orders have come from sectors of the city demarcated as high population density, low income in Delhi-NCR.

After acquiring Gurugram-based GrocerMax in June last year,Tata Group has jumped into the online grocery shopping bandwagon with the soft launch of its e-tailing platform StarQuik.com. The founder of GrocerMax K.Radhakrishnan is currently the Co-founder at Tata Starquik.com.

The brand, which was launched in December last year, has tasted an unqualified success and is pretty happy with the business model and is hopeful of extending the services to all Star Bazaar stores soon.

K.Radhakrishnan, Co-founder, Tata StarQuik.com during India Food Forum 2018 said, “We are now opening in Thane and plan to soon cover whole of Mumbai. Then we go to Bengaluru and Pune. In next one year, we will be in all the cities where Star Bazaar is like Gujarat, Bengaluru, Pune, Mumbai and Hyderabad.”

Starquik is the Omnichannel arm of Star Bazaar Retail where Star Bazaar is a B2B partner. The idea behind launching the brand was to extend the service coverage area of store using the online services.

Radhakrishnan said, “So Starquik is an online site and we sell 10,000 items that are sold in the Star Bazaar store within 3-hours to the customers door-step that covers all perishable, fruit and vegetables, milk, meat, fish, dairy, all FMCG and general merchandise. I doubt any other player anywhere else in the country is doing the kind of model that we are doing.”

According to Radhakrishnan, in grocery, being big does not ensure success. It takes several decades to be able to understand the supply chain and the consumer aspirations and expectations and there are very few players internationally who have done grocery online retail successfully.

“I think we have a model which is a winner and we are capable enough to compete competitors like Amazon. There is enough space for everybody. It is a US $300 billion market. So it will take a long time to get saturated. We have no worry at all,” asserted Radhakrishnan.

He further added, “We are a part of TATA company, so trust that comes from the name of 150 years of existence is huge and the other thing is that no one does 10,000 items in 3-hours to customers door-step.”

The brand, which was launched in December last year, has tasted an unqualified success and is pretty happy with the business model and is hopeful of extending the services to all Star Bazaar stores soon.

Elaborating on the business model, Radhakrishna said, “We have a asset-like variable-cost model and we operate on top of the Star Bazaar stores. We are paper-less, error-less platform and we have built very good front-end and we have our own open source, ERP system at the back. We work with 14 apps which inter-link into each other. We track everything. Technology is actually not really visible but present at the back-end. ”

“Enhancing the customer experience is built into the model but it will keep on evolving. So I think just doing the basics right is a great service for the consumers today as far as grocery is concerned. The consumer is struggling to buy grocery in an easy manner at the same time they also want to save money. Either it is too difficult and you save money and actually go through the hardships or the product is too expensive. We believe we will give convenience as well as saving and great quality merchandise to the customer,” concluded Radhakrishnan.

Beating its global rival Walmart, Amazon has made it to the Indian food retail market as the first foreign company to start its food retail venture in India.  In 2017, the ecommerce giant received affirmation from the Indian government to invest $500 Mn in India’s food retail space.

Amazon Retail Pvt. Ltd. will be providing the grocery services and will start with its pilot services in Pune thereby giving competition with other leading online grocery and food retail marketplaces like Grofers, Bigbasket, Supr Daily, who received similar approvals from the government for food retailing.

Walmart which is planning to acquire a 40% stake in Indian ecommerce major Flipkart can be taken as the reaction to this development by amazon in the progressive investments in the Indian markets.

Amazon spokesperson in the statement said, it will take around a quarter for the company to completely roll out its food retailing business in the country.

Amazon has already launched Amazon Now, an app for food and grocery items home delivery to meet their instant food demands. Currently, Amazon’s warehouses in India do not store food items to meet the Amazon Now demand. With this development, amazon has achieved the direct access to the consumers.

All the major e-commerce companies are constantly vying to capture major chunk in the Indian Food space like Alibaba (recently acquired BigBasket), Walmart are aggressively trying to now eat the major share in Indian food and grocery vertical.

Bengaluru-based food and grocery wholesale marketplace, Jumbotail, has raised $8.5 million (around Rs 55.12 crore) in series-A funding led by Kalaari Capital and Nexus Venture Partners. Nexus Venture Partners had earlier invested $2 million (around Rs 13 crore) in the company.

Bala Srinivasa, Partner, Kalaari Capital, said, "About 98% of India’s food and grocery consumption is via kirana stores. We are excited by Jumbotail’s ability to eliminate information asymmetry, aggregate previously unavailable demand-and-supply data, and significantly improve economic outcomes for manufacturers, brands, financial institutions and kirana owners."

Jumbotail was founded by Stanford alumni, Karthik Venkateswaran and Ashish Jhina in 2015. The company works with kirana stores and businesses, including hotels and restaurants in Bengaluru, to build an efficient supply chain for ordering staples, spices, dry fruits, packaged foods, and FMCG products.

The company plans to utilise the funds for building technologies and enhance operational capabilities.

Ashish Jhina, co-founder & COO, Jumbotail, said, "Manufacturers and brands can instantly get direct and highly targeted access to thousands of retailers and institutional customers through the Jumbotail platform without needing to invest in expensive physical distribution networks. Jumbotail also opens up the Kirana network to financial institutions looking to extend credit in a cost-effective and scalable manner."

Grocery delivery startup BigBasket has partnered with retail tech company SnapBizz as it looks to push its private labels into more kirana stores in the country.

Abhinay Choudhari, Co-founder, BigBasket, said, while B2B constitutes 17-18% of the company's total business, it is expected to grow to 25% in the next two to three years.

Choudhari added, "We are in the process of scaling up our B2B business and have plans to achieve Rs 1,000 crore exit rate by the end of FY18. Currently, kirana stores form about 70% of our B2B business, while the rest is revenue from hotels, restaurants and caterers."

The two companies have created a supply chain platform that will enable kirana stores to automatically generate orders using predictive analytics of SnapBizz's technology, which will then be fulfilled by BigBasket.

Chirantan Bhabhra, Director of sales, SnapBizz, said, "Kirana store owners often have to spare a whole day to go to a wholesale market and buy products, and often there is also a lot of wastage. This new platform will help create a level-playing field with the modern retail store."

Choudhari said BigBasket's supplies to kirana stores are priced at wholesale prices irrespective of the size of the order.

BigBasket's focus on B2B is evident from the fact that it recently set up a dedicated distribution centre for servings businesses in Bengaluru and plans to set up more in six cities this year.

India's online grocery delivery service BigBasket and smaller rival Grofers India have begun talks on a possible merger, a source has revealed.

The report said, If the merger goes through, SoftBank Group, which is an existing investor in Grofers', will participate in a $60 million to $100 million funding round in the merged company.

The report also said, the talks, which are in early stages, may value BigBasket at about $700 million to $800 million, while Grofers could be valued at $150 to $200 million.

Online grocery sales are a fast growing segment in India's e-commerce industry as more consumers log in to internet for their purchases.

By Sunil Pol

Localbanya, the Mumbai based online convenience store has today announced its entry into the ready-to-cook market in next 45 days.

“We are entering the ready-to-cook business in next 45 days with our services across Pune and Mumbai area,” shared Karan Mehrotra, Co-Founder, and CEO, Localbanya.

The grocery store is planning to deliver cut fruits and vegetables in Mumbai and Pune.

The online grocery retailer is initiating the move to offer convenience to working urban women while saving their time.

Localbanya is presently offering its services in Mumbai, Pune, Delhi-NCR and Hyderabad.

With the online grocery and food retail market looking poised for fast growth, soon to be launched app based and technology driven start up ‘24x7Fresh’ will hire more than 1500 executives and will launch in 30 cities across India in the next 12 months.

The company wishes to hire technology, marketing, logistics and customer support executives and is also keen to hire resources from established online retail markets internationally-who would already have a head start in this domain. 24x7Fresh are working with several HR recruitment agencies to achieve the numbers.

‘24x7Fresh’will follow the hub and spoke model and will offer a wide line up of grocery, ready-to-eat food items, and health and beauty products.

It will begin with an inventory of nearly 15,000 products that will include fresh veggies and fruits for neighbourhood delivery. The brand is also set to introduce a unique one hour delivery model that no other entrant have achieved so far

“We’re looking for people with fresh and innovative ideas to establish a rewarding career with us. With ‘24x7Fresh’, and the industry poised for significant growth in the next 5 years the opportunities to grow with the industry will be phenomenal. The company has planned attractive 3 month appraisals along with complimentary meals and an open platform for employees to share their ideas,” said Randheer Kumar, Cofounder and CEO, 24x7Fresh.

Kumar is also the Co-Founder of Mangoesfresh.com, a web based portal for retail of mangoes.

The segment of online retail could be the next big emerging story in India. Business advisory firm Technopak have gone on record stating that the online grocery segment is expected to see an eight-fold growth in next two years and will be a 3000 crore-4000 crore market by 2017.

LocalBanya.com, the online grocery provider located in Mumbai, is going to offer a wide variety of international foods to its ever-growing catalogue of products. The grocery player is currently active in areas such as beverages, oils, pastas, sauces and packaged foods.

Speaking on the new addition, Rashi Choudhary, Co-founder & COO, LocalBanya.com, said, “We’re happy to introduce this new category to our bouquet of products. Our World Foods range includes popular international products like cheddar crackers, cranberry & rasberry fruit drinks, macademia nuts amongst a host of other exciting products.”

LocalBanya presently has over 12,000 products listed on its site providing service in Mumbai, Thane and Navi Mumbai.