Original Article Journal of Social Welfare and Management

Volume 10 Number 3, September - December (Special Issue) 2018 DOI:

http://dx.doi.org/10.21088/JSWM.0975.0231.10318.26

Study on Failures in operating Start-Up with Special Reference to

Doodhwala

Abstract

The last decade has seen tremendous growth in use of internet and mobile phone in India. With the customer
increasingly shopping online during the pandemic, several product categories that were hitherto unpopular on the web,
have picked up steam. Milk delivery is a delivery service dedicated to supplying milk. This service typically delivers
milk in bottles or cartons directly to customers' homes. Milk has a short shelf life. The rapid deterioration of milk
products forces dairy processors to critically optimize and plan their production and delivery schedules. Doodhwala is a
hyperlocal delivery start up from Bangalore that delivers a large variety of fresh grocery items straight to home. It was
founded by Aakash Agarwal and Akbari in the year 2015. The study focusses on various challenges faced by the
Doodhwala and to study the impact of Doodhwala in the society. The data is collected from secondary sources. Some of
the reason for doodhwala’s failure where operating on Low Margins, The Acquisition Cost of a customer was too high
and also, they faced a lot of competition from other start-ups and also from big companies

Introduction start-up culture these core values tend to reflect the

personalities and ethos of the people who worked for the
business.
What Is Startup Culture
A start-up is used by individual founders or
entrepreneurs to search for a repeatable and scalable
business model. More specifically, a start-up is a newly
emerged business venture that aims to develop available
business model to meet a market place need or problem
founders start- ups to effectively develop and validate a
scalable business model.
A start up culture is a workplace environment that
values creative problem solving, open communication
and a flat hierarchy. In a corporate culture core values are
typically informed by the identity of the company
including its mission statement, products and customer
services. In
Author’s Affiliation: 2nd year, M.Com, Dept. Commerce, St.
Aloysius College, Elthuruth, Thrissur, Kerala 680611, India.
Coressponding Author: Namitha P Nair, 2nd year, M.Com,
Dept. Commerce, St. Aloysius College, Elthuruth, Thrissur, Kerala
680611, India.
E-mail: namithapnair1996@gmail.com
Received on 28.11.2018, Accepted on 31.12.2018
Doodhwala
Doodhwala is an innovative milk-tech company that is
revolutionizing the hyper-local morning delivery market.
Our app offers free subscription and delivery for all
daily essential items. It features 70+ varieties of milk,
and over 10,000 products, so now our customers rely on
us to not only supply their daily need items, but also
items they can’t find anywhere else.
Doodhwala has the largest variety of milk in India, and
we are the fastest growing milk delivery platform. Our
customers simply subscribe to the products they like
from categories such as dairy, bakery, fruits &
vegetables, meats, grocery items, and other daily use
items; and we deliver it to their doorstep before 7AM.
The startup focused on any citizen who wants to
subscribe to a regular milk delivery. This target group is
nearly 85 per cent of the country. They worked to solve
the problems in the traditional supply chain and make it
more efficient. Doodhwala had a vision to provide a
more effective delivery system for milk. They were also
able to decrease the wastage by 70 per cent. Doodhwala
utilizes innovation for quick and hassle-free delivery.
The team was also good at analyzing consumer data and
predicting the market. Doodhwala connected with a large
number of milkmen to get their supplies.
Doodhwala was operational in Bengaluru, Hyderabad and
Pune by the time they shut down. They used to complete
over 400K conveyances in a month a year ago. They also
delivered more than 30,000 liters of milk each day before 7
am, out of which 60 per cent was in Bengaluru alone. Both
of the co-founders started the operations and scaled a 5-
member team to a 400-member team in just 3 years,
making Doodhwala India’s largest subscription-based e-
grocer. According to co-founder Ebrahim Akbari,
“Consumers were looking for better ways to find good
quality unadulterated farm milk. In a nutshell, they wanted
a punctual, cost-effective and a non-traditional option for
milk and other dairy products”.
Statement of The Problem
Doodhwala is now failed start-up in India. It is an
Indian While the startup had shut down, their founders
say that they have closed their operations due to
unfavorable circumstances and have transferred the rights
of remaining customers to Freshwomen
Objectives
• To study the growth of Doodhwala in Indian society.
• To study various challenges faced by the
Doodhwala.
Methodology
This study is descriptive in nature. The data is collected
from secondary sources like newspaper and internet.
Findings
Within 3 years of operations, Doodhwala witnessed
extremely rapid growth:
 The company was doing around 30,000
deliveries a day.
 It grew 5 times during 2018-2019 with an
85% customer retention rate. While most
companies and online e-commerce retailers
struggle with the frequency of purchases,
Doodhwala received customers at a minimum
of once a week for a recurring purchase,
making its retention rates one of the highest in
the industry.
 Doodhwala was one of the largest milk e-
tailers moving 13 lakh liters monthly and had
the highest delivery fulfillment rate at 99.8%.
 Doodhwala had industry's lowest operational
cost at 5% cost of sales.
 Doodhwala's shut down, despite having a
wide base of happy customers, left many
guessing the possible reasons behind the
shuttering.
Business model
There many things Doodhwala did differently than
previous and current players that made its business
model robust and cost-effective.
The main highlights of Doodhwala’s business model
were:
 The hybrid model for last mile workforce -
Consisted of existing milkmen and part-time
workers.
 Efficient mapping of delivery routes -
Significantly lesser number of delivery
executives were required to complete ‘x’
number of deliveries since all the delivery
routes were mapped efficiently.
 Lower dependence on manual strength -
Planned delivery leading to a lower dependency
on delivery executives as well as inventory.
 Unlimited Delivery Base - Focus on morning
delivery helped easier hiring - basically, anyone
interested in working for a few hours in the
morning could be a Doodhwala delivery
executive.
 Resource optimization - Planned demand
reduced inefficiencies and optimizes better
utilization of resources.
 Drastically reduced cost - The right
combination of technology and process in every
step of the cycle - procurement, warehousing,
and sorting reduced cost.
 Predictive inventory - Subscription model made
way for strong predictive inventory algorithms
which ensured almost zero wastage.
 Advanced algorithms - Cost-benefit approach
towards technology laid such that every
implementation either increased revenue or
decreased cost across Doodhwala's supply
chains
 Single delivery slot network - The network of
milk delivery guaranteed low mid-mile costs
due to an obvious reason i.e, no traffic in the
morning hours. Plus, it also guaranteed no peak
hour rush.
 Market and Demand Analysis - Adoption of
Omni channel is driven by digital demand. It
allows optimization on the logistical front,
better inventory management across all points
of sale.
 High customer density - To curtail last mile
costs, Doodhwala completed 10000 deliveries
every hour. Each delivery executive completed
100 deliveries in a 3-hour shift.
 Efficacy of micro-delivery model over on-
demand fleet - Ensured higher customer
engagement and focused on high frequency -
everyday delivery.
Various challenges
 They were burning Too Much Cash,
 They were operating on Low Margins,
 The Acquisition Cost of a customer was too
high,
 Use of Excessive Discounts and Cashbacks,
 There was no clear competitive advantage or
differentiating factor,
 They faced a lot of competition from other
 Conclusion Reference
The last mile delivery is the biggest challenge for every e- 1. https://en.wikipedia.org/wiki/
tailer in this country. Low efficiency of resources and Main_Page
route-planning problems are the core issues that cause the 2. https://timesnext.com/doodhwala-
whole system to be inefficient and expensive. This paired startupfailure/
with the challenges in delivery infrastructure bring 3. https://businessfailuree.com/
additional problems to the state of the last mile. 2021/02/20/how-doodhwala-business-
This case is still wrapped in mystery as to what went failed/
wrong with Doodhwala, and what happened to them is still 4. https://startuptrak.com/7-reasons-why-
a question mark. Yes, there are numerous reasons why they doodhwala-failed/
drowned like the Titanic, but a solid conclusion is still far 5. https://startuptalky.com/doodhwala-
from being clear. milk-delivery-app/
#doodhwala_challanges
6. https://inc42.com/buzz/doodhwala-
shuts-down-freshtohome-supports-its-
delivery-services