[TechSparks 2020] The key thing for an entrepreneur is to know what not to do: Licious Co-Founder Abhay Hanjura

Licious has built a powerful meat brand and created an ecosystem around manufacturing, supply, distribution, and packaging. At TechSparks 2020, Co-founder Abhay Hanjura revealed how the startup created a brand new category and their plans for the future.

Six years ago, when Abhay Hanjura and Vivek Gupta met over lunch and ordered a tandoori chicken, dal, and roti, little did they know that this would change their lives forever. The meal was so bad that after tasting the chicken, they joked, "Is there a way to bring life back into this chicken?!"

Their journey, which began in mid-2015, has taken Licious to soonicorn status (startups with the potential to enter the unicorn club), with close to $100 million dollars in annual revenue as of FY21.

Being meat lovers, both Abhay and Vivek today throw around phrases like "Born to Meat" and  "Work around the Cluck."

Abhay spoke to YourStory on the sidelines of TechSparks 2020, India's India's largest and most influential startup-tech conference.

The founders were initially baffled by consumer behaviour and perception of fresh meat. "People trusted anecdotal learning while buying meat. They would look at us and say our plan of selling meat online would not be able to compete with local butchers.

"A friend once told us that when he touched a fish in the market, he could smell the backwaters of his state. I was taken aback at first and went to the food safety person in my company. He told me it was nothing remotely fresh, and to think people were associating that scent with something authentic!" Abhay said.

Licious had to do "heavylifting" for meat in India due to cultural preferences. They started listening to the consumer and then started building the product. According to Abhay, this is an emotional category because it is "akin to a celebration".

The founders decided to own the entire manufacturing and supply chain instead of following the marketplace model.

They took responsibility from source to packaging to delivery and had to adopt the chilled delivery concept because that ensured freshness of the product. They created a 150-point checklist, worked with producers directly, and spent significantly more to buy the produce.

Abhay Hanjura (right), Co-founder of Licious, believes technology will make adoption of ecommerce easier.

"In 2015, we were building our manufacturing, logistics, ecommerce, and even the brand. Many investors did not understand the way consumer experience had to be delivered as the field was new. D2C allowed us to deliver quality products.

"Investors were worried. It did not work in China; how would it work here? In D2C, we could control our inventory as we knew what the consumption cycle was. That's why we did not go to the physical retail side. The key thing for an entrepreneur is to know what not to do," Abhay said.

Blueprint for scale

Licious focuses on high repeat cohorts, unit economics, and word of mouth to build the brand. The startup pegs India's meat market at $45 billion and believes that it has created a blueprint for scale after operating in seven cities.

The startup chose to operate in Panchkula, a small town in Haryana, because it wanted to understand the dynamics of meat consumption in small towns. It has a plan to expand into smaller towns going forward.

"According to our data, Bangalore alone consumes $1 billion worth of meat per year and it is an unorganised market. With digital penetration on the rise, even a small town will have Google Pay. Technology is going to make everything easy and we should expect to see even our mothers order through the app," Abhay said.

The company also has value adds - 20 percent of its top line comes from its marinades and ready-to-eat categories.

Licious, which believes startups can play a major role in working with it to solve for the agri community, aims to build an entire community around meat and agriculture.

"We are category creators and our meat technicians have pride in what they are doing. We have a growth path laid out for them. Licious is spending a lot of time in creating value for the agri community. Think about the scale we have to handle: 150 SKUs, two-day shelf life and 100 centres to deliver. When you build such a category and learn from it, you are able to scale it up fast."

The pandemic tested the character of its team, but the founders believe they are building it by keeping the bar high with the highest food safety standards.

"The power of good habits allows you to fly. The pandemic allowed us to serve more customers and helped our partners with long-term equitable terms of trade. We all grew together; it was not a journey where we alone profited," Abhay said.

For more information on TechSparks 2020, check out our TechSparks 2020 website.  

TechSparks - YourStory's annual flagship event - has been India's largest and most important technology, innovation, and entrepreneurship summit for over a decade, bringing together entrepreneurs, policymakers, technologists, investors, mentors, and business leaders for stories, conversations, collaborations, and connections that matter. As TechSparks 2020 goes all virtual and global in its 11th edition, we want to thank you for the tremendous support we've received from all of you throughout our journey and give a huge shoutout to our sponsors of TechSparks 2020. 

Edited by Anju Narayanan