Cash Cow : Online grocers are now banking on milk delivery

Food-delivery platform Swiggy and online grocer BigBasket have zeroed in on their next big cash cows: milk-delivery startups that can enrich their frequency of orders and make customers stick. Swiggy, looking to start a grocery-delivery business, is in early talks to acquire subscription-based milk-delivery startup Supr Daily.

Alibaba-backed BigBasket has held buyout talks with Pune-based RainCan, Gurgaon-based Milk Basket and Bengaluru-based Daily Ninja. None of these talks are near finalisation.

The milk-delivery startups could help Swiggy and BigBasket increase their frequency of orders to 15-20 times a month from 4-5 times a month now. The grocery segment is becoming hyper-competitive with Amazon India and Flipkart doubling down on the category.

Indian households buy milk almost daily, each spending more than Rs 1,000 a month on average. And since margins earned on milk are low, online milk-delivery startups are adding other grocery products to their platforms, RedSeer Consulting said in a report.

BigBasket handles 60,000-70,000 orders a day across India, and Swiggy more than 300,000 food-delivery orders a day, as per industry estimates. Daily Ninja, which recently launched in Hyderabad, handles about 25,000 orders a day, according to the company. RainCan handles about 10,000 orders a day, Milk Basket about 8,000 and Supr Daily about 5,000, according to industry estimates.