Reliance Industries, one of India’s leading conglomerates, has reportedly acquired Milkbasket, a startup that specializes in daily customer orders, further strengthening its position in the e-commerce space. The acquisition comes after two senior Reliance directors joined Milkbasket’s board. Milkbasket’s unique offering of delivering milk to customers’ doorsteps each morning provides an opportunity for Reliance to expand its customer base and upsell additional products through its platform. With this strategic move, Reliance aims to compete with other major players like Amazon and Flipkart in the race for dominance in India’s e-commerce market.
While the Tatas were exploring their super app aspirations through the acquisition of Big Basket, Reliance seems to have outdone them by acquiring a startup that caters to customers’ daily ordering needs.
Reliance has reportedly finalized the acquisition of Milkbasket, with two senior directors from Reliance Industries Limited joining Milkbasket’s board. According to reports, Rajendra Kamath, Chief Financial Officer of Reliance Retail Value and a 29-year veteran of Reliance, along with Nikhil K Chakrapani, CFO of Reliance Content Management and a director at Jio Infrastructure Management, have been appointed as additional directors on Milkbasket’s board as of 19th July.
In conjunction with this development, Anant Goel, the co-founder and CEO of Milkbasket, has resigned from both the board and his CEO position. In May, it was reported that Reliance was in advanced stages of acquiring Milkbasket at an estimated cost of $40 million (Rs. 300 crore).
However, the acquisition process faced some challenges. Kalaari Capital, an early investor in Milkbasket, had previously sold 15% of its stake to a company called MN Televentures against the founders’ wishes. The Milkbasket founders had hinted at MN Televentures’ affiliation with Reliance, and by selling a portion of their company to MN Televentures, which has a representative on the board of Jio Infocomm, it became unlikely that any other company would be interested in acquiring Milkbasket.
The founders allegedly hesitated in transferring the company’s shares to MN Televentures, leading MN Televentures to approach the National Company Law Tribunal due to the delay. This controversy and ensuing legal proceedings likely deterred other potential acquirers, leaving Reliance as the frontrunner.
Reliance’s keen interest in acquiring Milkbasket stems from its delivery of milk to consumers every morning in major cities such as Bangalore, Hyderabad, Chennai, Noida, and Delhi. While milk products themselves have low profit margins, milk delivery presents an appealing business opportunity due to the potential for upselling additional products with these orders. Regular milk buyers can be encouraged to purchase items like bread, eggs, and eventually higher-margin products like groceries. Once customers become accustomed to ordering through the platform, there is the theoretical possibility of persuading them to make high-margin purchases, such as electronics, from the same platform.
Milkbasket fits seamlessly into Reliance’s plans in this regard. It can introduce a new cohort of loyal users to Reliance, who can then be enticed to make purchases on JioMart. The Tata Group appeared to adopt a similar strategy by acquiring the grocery delivery app Big Basket as the centerpiece of its super app plans. Other e-commerce players like Amazon and Flipkart have also focused on their own grocery verticals to encourage repeat orders. With Reliance now seemingly equipped with its high-frequency app through Milkbasket, the competition for customers in India’s e-commerce space has intensified once again.
