Licious Business Model: How does Licious Earn Money?

I am sure you already know about the Licious as it was founded in 2015 Abhay Hanjura and Vivek Gupta and now it becomes the best or can say leading direct-to-consumer (D2C) brand in India’s meat and seafood industry. The company has revolutionized the market by offering fresh, high-quality products through a vertically integrated supply chain. Therefore today I am going to tell you about Licious Business Model and how does it earns money such exploring its revenue streams, financial performance, and strategic initiatives that contribute to its success.

Licious Company Details

Attribute	Details
Company Name	Licious (Delightful Gourmet Pvt. Ltd)
Founded	December 2015
Founders	Abhay Hanjura and Vivek Gupta
Headquarters	Bengaluru, India
Industry	Retail (Fresh Meat, Seafood, and Gourmet Products)
Services	Online meat and seafood delivery, including ready-to-cook and ready-to-eat products
Area Served	28 Indian cities, including Bangalore, Hyderabad, Delhi-NCR, Chandigarh, Mumbai, Pune, Chennai, and Kolkata
Number of Employees	Approximately 3,150 (as of 2023)
Valuation	Achieved unicorn status in October 2021 with a valuation exceeding $1 billion ; aiming for a $2 billion valuation with a planned IPO in 2026
Revenue	Expected to reach ₹1,500 crore within 12 months from November 2022
Funding	Raised over $310 million to date; notable investors include Temasek, 3one4 Capital, Bertelsmann India Investments, Vertex Growth Fund, IIFL AMC’s Late Stage Tech Fund, Avendus Capital, Mayfield India, Sistema Asia Fund, Neoplux Technology Fund, Vertex Ventures Southeast Asia & India, Nichirei Group, and UCLA
Recent Developments	Planning an IPO within the next 12-18 months (as of February 2025) – Expanding brick-and-mortar presence with a target of 500 stores in the next five years – Focusing on ready-to-cook and ready-to-eat product ranges – Launched plant-based meat brand ‘UnCrave’ in October 2022 – Initiated ‘All You Can Eat Meat Buffet’ ad campaign featuring The Great Khali in March 2023

Business Model Overview

Licious operates on a farm-to-fork model, controlling the entire supply chain from sourcing to delivery. This approach ensures stringent quality control and hygiene standards, addressing common concerns in India’s traditional meat market. By owning the back-end supply chain and cold chain infrastructure, Licious maintains product freshness and minimizes inventory losses.

Revenue Streams

1. Product Sales

The primary revenue source for Licious is the sale of a diverse range of meat and seafood products, including:

• 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.

These products are sold through Licious’s online platform and mobile app, catering to urban consumers seeking convenience and quality.

2. Subscription Services

To foster customer loyalty and ensure recurring revenue, Licious offers subscription plans that allow customers to schedule regular deliveries of their preferred products. This model provides convenience to customers and predictable income for the company.

3. Private Label Products

Licious has developed its own range of private-label products, such as marinated meats, cold cuts, and ready-to-cook items. These value-added offerings cater to urban consumers seeking convenience and yield higher profit margins compared to standard products

4. Delivery Fees

While Licious offers free delivery for orders above a certain amount, it charges a delivery fee for smaller orders. This strategy helps cover logistics costs and encourages customers to increase their order value to avail of free delivery.

5. Customizable Bundles and Combos

The company generates additional revenue by offering curated product bundles and combos, encouraging customers to purchase more items at once. This approach not only increases the average order value but also enhances customer satisfaction by providing variety and value deals.

6. Partnerships with B2B Clients

Beyond the direct-to-consumer model, Licious collaborates with restaurants, hotels, and cloud kitchens, supplying fresh and processed meats for commercial use. These partnerships contribute significantly to its revenue and help in expanding its market reach.

Financial Performance

Licious has experienced substantial growth since its inception:

• Revenue Growth: The company’s operating revenue increased from ₹1,254 million in FY2020 to ₹6,657 million in FY2022.
• FY23 Performance: In FY23, Licious’s operating income remained relatively flat, with a 9.6% growth to ₹747.7 crore from ₹682.5 crore in FY22. The company reported a loss of ₹500 crore in FY23, a slight increase from ₹485 crore in FY22
• FY24 Update: In FY24, Licious reported a revenue of ₹685 crore, an 8% decline from the previous year. However, the company successfully reduced its net loss by 44% to ₹294 crore, attributed to strategic cost-cutting measures and a focus on owned distribution channels.

Strategic Initiatives

1. Omnichannel Expansion

Recognizing the importance of an omnichannel presence, Licious is expanding its offline footprint by opening physical stores in key markets. The company plans to establish 500 offline stores over the next few years, aiming to enhance brand visibility and cater to a broader customer base.

2. Focus on Owned Channels

Licious has shifted its focus towards owned distribution channels, reducing reliance on third-party platforms. This strategy allows better control over customer experience and margins. The company attributed part of its revenue decline in FY24 to the closure of third-party distribution channels like Dunzo and a reduction in exposure to modern trade and local stores.

3. Product Diversification

The company continues to innovate by introducing new product lines, such as ready-to-eat meals and regional specialties, catering to evolving consumer preferences and increasing its market share.

Challenges and Opportunities

While Licious has established a strong brand presence, it faces challenges such as:

• High Operational Costs: Maintaining a vertically integrated supply chain and ensuring stringent quality controls result in significant operational expenses.
• Market Competition: The emergence of new players in the meat delivery space intensifies competition, necessitating continuous innovation and customer engagement.

However, opportunities abound:

• Growing Demand: With increasing consumer awareness about quality and hygiene, there is a rising demand for fresh, processed, and ready-to-cook meat products. Licious is well-positioned to capitalize on this trend by maintaining its high-quality standards and expanding its product portfolio.
  • International Expansion: Licious can explore global markets, particularly in regions with a high demand for premium meat products. Expanding beyond India could open new revenue opportunities and reduce dependency on the domestic market.
  • Technology Integration: Leveraging artificial intelligence (AI) and machine learning (ML) for demand forecasting, supply chain optimization, and personalized customer engagement can enhance efficiency and profitability.
  • Sustainable and Ethical Sourcing: With increasing consumer preference for ethically sourced and environmentally friendly products, Licious can strengthen its brand by adopting sustainable farming practices, reducing waste, and minimizing its carbon footprint.

Conclusion

Licious has successfully disrupted India’s meat and seafood industry with its direct-to-consumer, vertically integrated business model. By offering premium-quality, hygienically processed products and leveraging technology-driven supply chain efficiencies, the company has built a strong brand presence in the market.

Despite facing challenges such as high operational costs and competition, Licious is making strategic moves, including omnichannel expansion, a focus on owned distribution channels, and continued product diversification. With growing consumer demand for quality meat and seafood, the company is well-positioned for long-term success.

Looking ahead, optimizing costs, enhancing customer engagement, and exploring international opportunities will be key to Licious’s continued growth and profitability in the evolving food-tech landscape.