Licious, India’s first D2C (Direct-to-Consumer) fresh meat and seafood brand, has disrupted the highly unorganized meat and seafood market in the country. Founded in 2015 by Abhay Hanjura and Vivek Gupta, the Bengaluru-based startup has transformed how Indians purchase fresh, hygienic, and high-quality meat products. With a strong focus on freshness, convenience, and premium quality, Licious has established itself as a leader in this niche market.
In this article, we delve into Licious’s business model, its revenue streams, and the strategies that have enabled its rapid growth and success.
Overview of Licious’s Business Model
Licious operates on a farm-to-fork D2C model, ensuring complete control over its supply chain to deliver fresh and hygienic meat and seafood products directly to consumers. The company focuses on quality, transparency, and convenience, solving the long-standing issues of hygiene, adulteration, and inconsistency in India’s meat market.
Key Features of Licious’s Business Model:
- End-to-End Supply Chain Control:
- Licious manages the entire supply chain, from sourcing raw materials to processing, packaging, and delivery, ensuring freshness and quality.
- D2C E-commerce Model:
- The platform directly sells to customers through its website and app, eliminating intermediaries and ensuring competitive pricing.
- Cold Chain Infrastructure:
- Licious uses a robust cold chain infrastructure to maintain product freshness and safety throughout transportation and storage.
- Subscription and On-Demand Sales:
- Customers can order meat and seafood on demand or subscribe to regular deliveries, ensuring convenience and repeat business.
How Does Licious Earn Money?
Licious generates revenue through multiple streams, leveraging its product offerings, services, and customer-centric approach. Here’s how the company earns money:
a. Product Sales
- Licious primarily earns revenue by selling fresh and processed meat and seafood products. The product categories include:
- Fresh Meat: Chicken, mutton, and other meats.
- Seafood: Fish, prawns, and crabs.
- Ready-to-Cook Products: Marinated meats, kebabs, and curries.
- Cold Cuts: Sausages, salami, and ham.
- Eggs and Meat-Based Snacks: Additional offerings that complement the core product range.
The company charges a premium for its products, positioning itself as a high-quality and hygienic alternative to traditional meat markets.
b. Subscription Services
- Licious offers subscription plans that allow customers to receive regular deliveries of their preferred products. Subscription revenue ensures predictable, recurring income and builds customer loyalty.
c. Private Label Products
- The brand’s private-label products, such as marinated meats, cold cuts, and ready-to-cook items, yield higher profit margins. These value-added offerings cater to urban consumers seeking convenience.
d. Delivery Fees
- While Licious offers free delivery for orders above a certain amount, it charges a delivery fee for smaller orders. This helps cover logistics costs, particularly for orders that fall below the minimum threshold.
e. Customizable Bundles and Combos
- Licious generates additional revenue by offering curated product bundles and combos, encouraging customers to purchase more items at once.
f. Partnerships with B2B Clients
- Licious collaborates with restaurants, hotels, and cloud kitchens, supplying fresh and processed meats for commercial use. These partnerships contribute significantly to its revenue.
g. Regional and Festive Offerings
- The company launches seasonal and regional specialties, such as festive meat hampers or local delicacies, to capitalize on special occasions and regional preferences.
Why Licious’s Model Works
Licious’s success lies in its ability to address key pain points in the Indian meat and seafood market. Here’s why its model works:
a. Quality and Hygiene
- The brand guarantees meat that is free from chemicals, preservatives, and additives. It maintains high hygiene standards across its processing units.
b. End-to-End Supply Chain
- By owning its supply chain, Licious eliminates middlemen, ensuring product consistency and higher profit margins.
c. Freshness Guarantee
- Licious promises delivery within 24 hours of processing, ensuring that customers receive fresh products, not frozen or preserved ones.
d. Convenience
- With an easy-to-use app and website, Licious offers customers the convenience of ordering high-quality meat products from the comfort of their homes.
e. Urban Target Audience
- Licious caters to urban, middle- and upper-class consumers who are willing to pay a premium for quality and convenience, ensuring a profitable customer base.
f. Customer Loyalty
- Subscription plans, personalized offers, and consistent quality create a loyal customer base that drives repeat purchases.
Financial Performance
Licious’s business model and growth strategies have resulted in impressive financial performance:
Revenue Growth
- Licious reported a revenue of ₹1,500 crores in FY 2023, showcasing significant growth driven by increasing demand for hygienic and quality meat products.
Customer Base
- The company serves millions of customers across major Indian cities, including Bengaluru, Delhi, Mumbai, Hyderabad, and Chennai.
Funding and Valuation
- Licious has raised over $490 million from investors like Temasek, Multiples Alternate Asset Management, and 3one4 Capital. It achieved unicorn status in 2021 with a valuation exceeding $1 billion.
Challenges and Opportunities
Challenges
- High Operational Costs:
- Maintaining a cold chain and managing an end-to-end supply chain requires significant investment.
- Competition:
- Licious faces competition from other players like FreshToHome, ZappFresh, and traditional local markets.
- Perishable Products:
- Managing inventory and minimizing wastage is critical due to the perishable nature of the products.
- Scaling Beyond Urban Areas:
- Expanding into Tier 2 and Tier 3 cities poses logistical and pricing challenges.
Opportunities
- Expanding Product Portfolio:
- Introducing more value-added products, such as ready-to-eat meals and international meat cuts, can attract a wider audience.
- Geographic Expansion:
- Scaling operations in Tier 2 and Tier 3 cities offers significant growth potential.
- Global Markets:
- Expanding into international markets, especially regions with high demand for Indian meat products, presents new opportunities.
- B2B Partnerships:
- Collaborating with more restaurants, hotels, and cloud kitchens can drive B2B revenue growth.
Future Prospects
Licious has ambitious plans for the future, including:
- Expanding its footprint across more Indian cities and international markets.
- Enhancing its product range to include ready-to-eat meals and gourmet options.
- Investing in technology to improve supply chain efficiency and customer experience.
- Strengthening its cold chain infrastructure to support geographic expansion.
Conclusion
Licious’s business model combines innovation, quality, and convenience to address the long-standing challenges of India’s meat and seafood market. With its end-to-end supply chain, premium positioning, and focus on customer experience, the company has created a strong brand that resonates with urban consumers. As it continues to expand its geographic reach and product portfolio, Licious is well-positioned to maintain its leadership in the fresh meat and seafood market and capitalize on India’s growing demand for quality food products.
