Mother Dairy, a wholly owned subsidiary of National Dairy Development Board (NDDB), and one of the major suppliers of milk and milk products to the Delhi-NCR region in India has partnered with Noida based ecommerce company Delivery on Call to home deliver its products in Noida. Started in November 2011, Delivery on Call has so far been providing delivery services for groceries, bakery products, meat, laundry services, restaurants, repair services etc averaging about 150-175 orders a day; Mother Dairy’s milk products were added to their list of services in October 2012. The partnership was announced a couple of weeks ago, and we’ve been waiting for an interaction with Mother Dairy ever since.
Mother Dairy has booths all over Delhi-NCR, but the value proposition that Delivery On Call is pitching is that those at the booth don’t deliver products to consumers – consumers typically have to go and buy products from Mother Dairy. Delivery on Call aims to provide the direct to home channel for Mother Dairy’s products. People can sit at home and order from home instead of visiting the booths.
Why Delivery On Call Is Not Delivering Milk
Delivery on Call’s dairy shop includes several dairy products of Mother Dairy like curd, flavoured yoghurt, ice creams, kheer etc. but milk is not part of their product catalogue at the moment. Only UHT tetra packs are being sold on their online dairy shop leaving their dairy store incomplete.
Ankur Mehrotra, Founder & CEO, Delivery on Call told MediaNama that the it isn’t viable to sell milk yet: the cost of delivering milk worth Rs.30 will not work out, especially covering an area of 200kms. Apart from cost, pilferage and logistics of delivery are also issues that need to be addressed before delivering milk. To deliver milk at 7AM, Delivery on Call should start working at 2AM which is not currently within their means.
However, with enough response for the dairy shop and discussions with Mother Dairy, Delivery on Call is open to selling milk as well. Introducing milk in their store could be a real game-changer for both Mother Dairy and Delivery on Call solving a real pain point for consumers. Consumers can then avoid waking up early in the morning to collect milk from the Mother Dairy booths.
Delivery of Dairy Products: What Works
The dairy store is open only from 11AM to 6PM every day. All orders during this time will be delivered to the customer within one hour of placing the order. So far, orders are predominantly being placed at around 4pm just in time for evening tea or coffee. Since the sale of dairy products began in time for winter, presently, more orders are coming in for paneer and curd. However, Delivery on Call is awaiting summer months expecting to see an increase in the sale of ice creams. They have specialised packages that can sustain ice creams upto 4 hours.
How They Deliver
Delivery on Call does not store any of the Mother Dairy products. They are associated with the distributors of Mother Dairy from whom they procure the products and deliver them to the consumers. After every order is placed, the nearest delivery staff collects the products from the nearest distributor and delivers them to the consumers. They procure products that have a shelf life of at least 5- 10 days left, from the distributors. Delivery on Call does not charge the consumers for delivery of Mother Dairy products. Their agreed margin with Mother Dairy is inclusive of the delivery charges. The dairy products will be delivered only for a minimum order worth Rs. 100 which should be purely from the bucket of Mother Dairy.
Although Delivery on Call has vendors for grocery, they don’t carry dairy products because of low shelf life, pilferage etc. Besides, the grocery orders come in bulk for an entire month. To avoid any damage to the dairy products, grocery and dairy products are always delivered separately. This is the first time that Delivery on Call is directly involved in the sale of perishables. Although, they were previously involved in the sale of fruits and vegetables, the delivery was done by the vendor while Delivery on Call was only generating the orders and receiving a certain percentage cut for generating business. However, due to some problem, the vendor had to shut down business. Delivery on Call is now looking for new vegetable vendors to deliver vegetables.
Volume of Traffic
About 80% of the dairy products are ordered through phone calls and only 20% of the orders are received online. Delivery on Call note that the consumers still feels that it is easier to order on phone for daily needs than online. They believe that it will take time for ecommerce to expand. The sale of dairy products especially ice creams have been low because of winter. The dairy shop currently receives 4-5 orders a day. They are also going to introduce the option of gifting ice creams. Customers can order ice creams for any person of their choice and have it delivered at their home. Delivery on Call is expecting a good volume of traffic once the ice cream gifting option is also introduced.
The introduction of dairy products has given the ecommerce company the opportunity to also cross sell. While the reach of ecommerce may be considered to be low, the introduction milk will not go unnoticed. The orders may come through phones for a while but overtime, the online orders are also likely to pick up due to the value proposition it will offer to consumers. The dairy shop catalogue may have dairy products apart from milk with higher margins, but the demand for milk is usually higher compared to other dairy products. With the right delivery mechanism in place and higher volume, milk could bring Delivery on Call good margin.