Bengaluru-based Licious, a key player in the meat and seafood home delivery service, reported a significant narrowing of its net loss for the fiscal year 2024, achieving a reduction of 44% to Rs 294 crore. Despite this encouraging news, the company faced an 8% decline in revenue, dropping to Rs 685 crore compared to Rs 748 crore in the previous fiscal year. This juxtaposition of loss reduction alongside revenue decline raises important questions about the company’s strategic focus and market dynamics.
The drop in revenue has been largely attributed to the closure of key distribution channels, particularly the discontinuation of services with Dunzo, a prominent delivery partner. The company also observed a decrease in its exposure to modern trade and local retail stores. In response to these challenges, Licious has pivoted towards enhancing its own sales channels to regain market footing. Approximately 85% of Licious’s sales now stem from their own website, with the remaining revenue sourced from other online grocery and quick-commerce platforms.
Interestingly, Licious noted a robust 35% year-on-year growth in quick commerce deliveries, indicating that while some channels faltered, others thrived. This insight emphasizes the necessity of agility in adapting to changing market conditions. As co-founders, Ajay Hanjura and Vivek Gupta pointed out, these losses are being strategically managed as the company refines its operations to focus on a full-stack distribution approach.
In an ambitious move aimed at bolstering profitability, Licious plans to open 500 offline stores across key markets over the next few years. This initiative follows the recent acquisition of Bengaluru-based offline retailer My Chicken and More, expanding their physical presence to a total of 26 locations. This strategy reflects a commitment to an omnichannel model that synergizes online and offline experiences for customers, tapping into new user bases and enhancing overall brand visibility.
The company’s loyalty program, Infiniti, adds another layer of insight into consumer engagement. With around 2 lakh active weekly subscribers, it contributes to approximately 58% of the monthly business. This statistic underscores the importance of cultivating brand loyalty, especially in highly competitive sectors like food and grocery delivery. The loyalty program not only incentivizes repeat purchases but also engenders a sense of community among users.
Furthermore, Licious has pioneered a pilot program for 15-minute deliveries of ready-to-eat food items in select locations, while maintaining a standard delivery time of 30 minutes for other products. This focus on speedy fulfillment aligns with current consumer expectations for quick and efficient service in the age of instant gratification.
Looking ahead, the company forecasts a return to profit, anticipating earnings before interest, taxes, depreciation, and amortization (EBITDA) breakeven in the fiscal year 2025. The roadmap leading to this goal is underscored by a strategic emphasis on enhancing supply chains and cold chain logistics, built up during the pandemic.
Industry observers should note how Licious maneuvers through its current circumstances to not only stabilize its operations but also leverage them for long-term growth. The ability to adapt swiftly to market changes—whether scaling down on unproductive partnerships or focusing on building exclusive offline experiences—demonstrates a proactive management approach.
In conclusion, while Licious navigates a revenue downturn, its focus on operational efficiency, innovative delivery models, and expanded retail presence positions it favorably to tackle future challenges. If the company successfully capitalizes on its strengths, it may indeed emerge as a robust contender in the competitive landscape of quick commerce and meat delivery services.
