Can This Company Be India’s First Consumer Unicorn?
“Understand, when you eat meat, that something did die. You have an obligation to value it — not just the sirloin but also all those wonderful tough little bits.” -Anthony Bourdain
In the food space, India has seen atta (wheat flour) getting branded, butter getting branded and milk getting branded. Today consumers don’t buy groceries. Instead, they buy brands. While this might be true for other categories, meat as a commodity has been completely left out.
Contrary to popular opinion India is a meat-eating nation, with people shifting from vegetarian diets to non-vegetarian ones in large numbers. India is currently the second-largest processed meat and poultry market, growing at a CAGR of 22%, according to the global market intelligence agency Mintel. In fact, the Sample Registration System (SRS) baseline survey 2014 — released by the Registrar General of India — revealed that 71% of Indians above 15 years are non-vegetarian. Nevertheless, buying meat is one of the things that is still looked upon as stigmatic, people get their poultry and meats packed in black bags from unhygienic slaughterhouses that are clustered in some of the dirtiest and most crowded places of the city. However, backed with technology and innovation, Licious has the solution to these problems.
Story of Conceiving
Abhay Hanjura, a Kashmiri pandit by descent moved to Bangalore in 2004 to complete his undergraduate studies in biotechnology and after doing a management course he joined an insurance company where he rose in the ranks to become a senior vice president. When Abhay was planning a meal with some of his friends who had come to visit him from the US, he heard one of them remark that whenever he came to India, he turned vegetarian.
That got Abhay thinking.
He knew that some of the best tasting meat dishes were found in India. In fact, India consumed meat worth around $50 Bn every year.
With the rising middle class, increase in per capita income and economic upturn people were always going to spend more on quality-assured branded food.
Around that same time another boy, Vivek Gupta, a chartered accountant in a venture capital firm was itching to do something different, it turned out that Vivek’s VC firm was a client of Abhay and so the two of them met together often over meals and discussed ideas and talked about the scope of the consumer foods market in India. This gave birth to the concept behind Licious.
Challenges and Journey
Licious was found in 2015.
Starting with an initial external investment of USD $1 million, the investment amounts only climbed up as it started bagging investments in the millions; each investment being twice or thrice the previous. Now the company has already managed to serve over 300,000 customers, with over 90% repeat consumption across Delhi NCR, Bengaluru, Hyderabad, and more recently Chandigarh (different states in India).
In my opinion, the only thing that keeps the customer coming back again and again for the same service is consistency in quality and offers bang-for-their buck.
Licious charges an unheard-of delivery fee: 5% of the total amount of the order in order for it to cover the delightful, tight logistics experience it serves out. The company also charges 10–15% higher in terms of pricing relative to the traditional market and provides the finest quality meat to the customers.
However, Abhay and Vivek’s journey has not been completely smooth, their journey has involved dedicating a lot of time, from scratch, to understand the problems in this space. There have been no incumbent players in the organized meat market, but they were going to face stiff competition from the unorganized household names in local markets. The main problem was providing quality. The meat product sold till now was either frozen or unhygienic.
Licious adopted a full-stack, farm-to-fork model to maintain strict control over quality in its integrated supply chain. They personally went to all the suppliers who were mostly solo-entrepreneurs and had to build the supply chain from the ground-up.
Investors loved this method of complete focus on unit-by-unit sales. They opted for phased expansion going city-by-city to not dilute the quality and also to avoid spending wasteful money. Alongside building an eCommerce venture they have started training programs and quality-check, from the first checkpoint: the suppliers to the last: the delivery person, to ensure that the standard remains consistent throughout the whole progress.
Growth
By April 2016, Licious had raised $3.5MM for their Series A
The industry was set for a CAGR of 30% YoY, but Licious was growing at 300% YoY. This growth rate was desirable for the investors and raised $10MM in Series B in 2017, and just over a year- in 2018; they raised $25MM for Series C led by Japan’s Nichirei Corp in Series-D round of funding, along with existing investors.
The company knows that in a competitive market like that of India you need to stand out in terms of quality rather than price. The company has also shown innovation in designing and package efficiency.
Licious has grown in all aspects because it identifies itself as a tech start-up rather than as a consumer or food start-up. The company has kept track of all their clients, from what they purchased to the amounts they’ve spent, they have a database of the repeat purchases which helps in optimizing what appears on your screen the next time you open the Licious app or website.
One thing that I’ve observed being an avid food lover is that people in India are emotionally connected with their food and they know the importance of a good quality meal, this is the secret passage to the stomach of an Indian consumer; something that Licious has understood pretty well. As we can clearly see that customers don’t mind paying 10–15% extra in base pricing if they get the best quality product out there. Quality matters.
Licious claimed that it achieved INR 300Cr (~$41mn) in annual revenue (run-rate basis) as of March 2020. As COVID-19 disturbs the world of business, Licious has grown exponentially through these troubled times, with 3X growth in the pandemic. As consumers go online for shopping groceries, the company has gained a lot of popularity and fanfare for its quick and quality service.
Licious has reinvented the wheel of consumerism in the meat industry by glorifying exotic palates and has given respectable jobs to butchers in India (who were often looked down upon due to social stigma).
Their entry into the post-pandemic world keeps them on track for becoming the first consumer unicorn in India.
