HC ordered milk firms to test the products every 3 months

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.