Grocery startup Milkbasket bets on private labels, expects 40 pc revenue by year-end
Grocery delivery firm Milkbasket is looking at bringing in private labels across categories like dairy, bakery and fresh produce, and expects about 40 percent of its revenue to come from such products by the end of the year.
The company has been "experimenting" with private labels and has seen a good response to these products, Milkbasket co-founder and CEO Anant Goel said.
"We have been experimenting with private labels for a year across categories like eggs, pulses, whole spices, and dry fruits. We are now looking at creating five separate brand lines for dairy, bakeries, food, non-food and fresh produce," he said.
Goel added that sourcing of these items is under works, and brand name and other details will be formalised in the first half of the year.
"Private labels are already contributing 20-22 percent of revenues and we expect to double this, get to about 40 percent by the end of the year," he said.
Goel said the company has achieved an overall gross margin of 20 percent for the business.
"While the margin is higher in Gurugram, it is lower in cities like Hyderabad where we have just started. We expect this to improve and the overall numbers could be around 25 percent by the end of the year," he added.
By December 2020, the company expects its average revenue run rate to be upwards of $100 million (about Rs 710 crore).
Milkbasket operates in cities like Gurugram, Ghaziabad, Noida, Delhi, Hyderabad, and Bengaluru.
The company has raised close to $26 million in equity funding from Mayfield India, Beenext, Kalaari Capital, Unilever Ventures, Blume Ventures, Lenovo Capital (LCIG), few family offices, and $2.2 million in venture debt funding from Innoven Capital.
(Edited by Megha Reddy)