Milk Delivery startups struggling to grow?

Hyperlocal milk delivery companies are facing a funding crunch. Can technology save the day?

Hyperlocal delivery is a rising trend in Indian e-Commerce and the demand for on-demand delivery/at-home services is constantly increasing. From ordering food and groceries to fresh meat and vegetables and getting beauty services at home, the hyperlocal market is on the boom. According to Ken Research, the Indian Hyperlocal market is expected to grow at a considerable pace, exceeding INR 2,306 crore by 2020.

The hyperlocal delivery system caters to a limited geographical area with quick delivery of goods as per customer requirements within a short duration of time. Several start-ups have sprung up to meet the dynamic daily demands of the consumer, promising express delivery of orders and quick services at the doorstep.

India is a country that runs on tea and coffee, and hence milk has become one of the most essential everyday items for almost every Indian household. A number of milk delivery start-ups have also come up in the urban sectors, delivering milk, bread, eggs, and other daily consumables in the busy morning hours.

However, these milk delivery start-ups seem to be struggling to scale up and expand operations due to limited funding. The market is expected to undergo some consolidation in the coming months, owing to poor economics, complex supply chain, and profitability issues, reports ET. External funding is a major challenge. These start-ups are looking for merger opportunities with bigger players or limiting their operations to bring efficiency to the supply chain.

Bengaluru-based milktech startup Doodhwala recently discontinued its operations, selling its business to FreshToHome. Another start-up, Milkbasket is expected to scale down operations and limit its products to bring down operating costs and improve efficiency in the supply chain. Milkbasket currently delivers milk, bread, eggs, butter, juices, and other daily needs. DailyNinja, another early morning milk delivery service, is looking for a merger with BigBasket.

Startups in the milk delivery business execute as many as 80,000-90,000 orders daily, signifying their need and popularity. However, these companies need a solid strategy for survival and growth. Partnering with tech innovators to bring efficiency to logistics and supply chain operations can help reduce costs and improve performance dramatically.

Locus helps businesses in e-Commerce and hyperlocal delivery optimize logistics with AI-driven solutions, bringing efficiency, transparency, and consistency to the supply chain. 

Check out how we helped BigBasket optimize route planning and achieve 99.5% on-time delivery.