The Story Of Milkbasket And How It Navigated The COVID-19 Pandemic Lockdown

India as a nation is primarily agrarian and most of the economic contributors are agriculture and dairy.  Indians consumed a whopping 77.7 million metric tons of cow milk in 2019 alone and that puts it at the largest consumption in the world.  The next largest milk consumption was in the European Union with a consumption of 33.4 million metric tons.  Therefore it is only natural for a startup to utilise the opportunity existing in the delivery of milk and that led to the founding of Milkbasket.  Subsequently, the market was flooded with players like Ninjacart, BigBasket backed RainCan and Swiggy  backed SuprDaily.

Founding:

While Milkbasket currently operates in cities like Delhi, Gurgaon, Ghaziabad, Noida, Bangalore and Hyderabad, it was not always the case.  Milkbasket was founded in 2015 in Gurugram by Yatish Talavdia, Anurag Jain, Ashish Goel and Anant Goel.  Milkbasket originally began by delivering milk and other essentials in Gurugram to around 15,000 families before expanding into various cities.  However, Milkbasket did not dive into the business just because they saw an opportunity,  instead they did a lot of research into consumer purchasing and psychology, before coming up with a business model and this research yielded some interesting insights.

Research:

The crux for the business model was the quintessential question in every Indian household which is “Child, what do you want to eat for tomorrow?”  This led the founders to understand that Indians usually plan their meals for the next day between 7 P.M. to 10 P.M. the previous day.  Therefore Milkbasket decided to offer their deliveries before 7 A.M. in a contactless, easy and pre paid manner.    Moreover, the four founders studied the newspaper chains who made a profit even when selling for a low cost.  Furthermore, the founders interacted with various grocery store owners and found out although milk contributed to a large volume of sales, there was not much profit margin there.  However, these grocery stores made a profit by selling other products along with the milk.  The idea was the milk attracts the customers but it led them to purchase other products along with the milk.  Therefore Milkbasket also decided to do the same, which is to sell milk but also hold an inventory of other staple products.

Milkbasket set itself apart from other players by offering no minimum cost delivery and also streamlined delivery in a manner which creates the least disturbance for the customers.  From low shelf life products such as milk, fish, and fruits to daily essentials such as wheat, rice, and pulses, Milkbasket fulfils households complete grocery requirements.

Having started with just a hundred products in its inventory, Milkbasket now has 9000 products on its platform and caters to 1,50,000 across the country.  The startup delivers 80,000 litres of milk and 100,000 kg of vegetables and fruits daily.

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Navigating the COVID-19 lockdown:

India declared a nationwide lockdown on March 24th, 2020 which extended till the end of August.  The lockdown saw thousands of businesses go bust because of logistical issues and also due to the almost zero demand from consumers.  During the initial period when the lockdown was first imposed to curb the spread of the virus, Milkbasket witnessed a surge of 200-300 % in order volume from its customers.

Milkbasket took two important decisions to cater during the lockdown with the first one being an inventory cap for every customer purchase so their customers do not hoard products.  The second one being the decision to stop onboarding new customers and instead serve their existing customer base.  This has also led to strong customer loyalty as well as improvement of sales from existing customers.

Milkbasket goes on to prove that customer satisfaction should always be at the forefront of any business.  If Milkbasket does not lose sight of their goal then it is only going to grow from here on out.