Meesho, a household name today, is a leading online resale platform in India that allows anyone to establish their own reselling business with no upfront costs. It provides a platform for people to act as mediators between suppliers and buyers, removing the necessity for inventory management and the expenditure of money on tools and personnel. Meesho has grown in popularity as a simple and cost-effective solution to set up an online resale service. It is especially crucial during the pandemic since consumers are increasingly reliant on Internet shopping platforms. Meesho is proud to be at the forefront of India’s reselling sector. Let us know in depth about the success story of this startup.
About the Company
Founded by Sanjeev Barnwal, and Vidit Aatrey in 2015 in Bangalore, Meesho has a valuation of $4.9 billion as of March 2023. Meesho is a Hindi word that means “My Shop” or “Your Shop,” and it reflects the platform’s objective to provide users with a personalized and accessible e-commerce experience. Meesho, formerly FASHNEAR, debuted in 2015 as an app allowing people to buy garments and accessories from local stores. However, the founders quickly realized that clients were not interested in purchasing locally, and store owners desired to expand outside their immediate vicinity. As a result, they relaunched as Meesho and created a new business model that allowed shop owners to sell things online across the country.
This startup provides secure and affordable transactions, returns, and shipping to over 2.6 million resellers throughout India. The platform allows anyone to establish a business with no financial investment and works on a 10-15% commission-based model. With over 20,000 suppliers from more than 500 towns, Meesho enables merchants to sell a variety of products on social networks like WhatsApp, Facebook, and Instagram. Clothing, accessories, furniture, culinary utensils, and cosmetics producers are among the suppliers who list their products on Meesho.
Mission and Vision
Meesho’s goal is to help 100 million small companies succeed in the digital world. Its official mission is to “democratize internet commerce for everyone.”
Business and Revenue Model
Meesho is a business-to-business (B2B) platform that links manufacturers, resellers, and customers. Their primary source of income is the commission paid by vendors when a reseller sells a product on their marketplace. Meesho also makes money from logistics services, advertising, and the sale of non-sensitive data. They provide 0% commission on specific product categories and do not charge resellers any commission. Meesho is working to lower logistical costs in order to boost seller profitability, and they do not breach any privacy policies when selling data.
Meesho saw a tremendous boost in its user base during the Maha Indian Shopping League, with a 750% increase in users compared to the previous year’s event. This expansion was mostly driven by tier-4+ markets, which accounted for almost 60% of total demand, proving the platform’s penetration even in remote locations such as Khawzawl in Mizoram and Sopore in Jammu and Kashmir.
The company’s 0% commission scheme, which was introduced earlier this year, was a game changer for merchants, who saved over Rs 13.6 crore during the Christmas sale event alone. Meesho also signed up over 100,000 suppliers in advance of the sale, resulting in a 10X increase in sales over the previous year.
During the sale event, orders for women’s garments and accessories increased by 623% while orders for men’s goods increased by 640% compared to the previous year. During the sale event, customers saved over Rs 60 crore in discounts.
Meesho recently become a unicorn, thanks to a $300 million investment round led by SoftBank Vision Fund 2, which valued the business at $2.1 billion. The platform today has 100 million transactional users, sells over 40 million products, delivers to over 26,000 pin codes and 4,800+ cities in India, and had a 5X increase in user base and a 3X increase in GMV during FY22.
Funding and Investors
Meesho has received $1.06 billion in investment over ten rounds. Their most recent investment round was a $570 million Series F round on September 29, 2021.
Challenges Faced
The first difficulties stemmed from a lack of supply, transportation, and transaction options. However, the COVID-19 pandemic posed a huge difficulty for Meesho because it damaged the business of many of its suppliers, with Covid accounting for the majority of their sales. During the pandemic, Meesho helped its distributors recuperate some of their lost revenue by promoting essential goods like as masks, personal care products, sanitizers, and consumables. In addition, the company established a micro-credit strategy to ensure that its distributors could earn some money. However, the pandemic was not Meesho’s only issue; the company has recently encountered difficult times, huge capital burn, no profit in sight, and increased competition from large competitors like as Flipkart and Amazon.
Meesho has also had issues with counterfeit products delivered to its consumers. Meesho makes it simple for any seller to create a storefront on the platform, yet this has resulted in the sale of counterfeit goods. Meesho has been accused of selling counterfeit Rolex watches as well as merchandise from well-known brands such as Ray-Ban, Adidas, Nike, Titan, and Gucci. The corporation states that all products sold on the platform are subjected to multiple rounds of quality control, but counterfeit products continue to surface on it. In April 2022, Meesho laid off around 150 employees due to a restructuring initiative of the Meesho Superstore grocery delivery service.
Future Goals
Meesho intends to increase its technical and product capabilities and grow its product offers to more than 50 million items. The company also intends to become the preferred platform for consumers, entrepreneurs, and sellers, as well as to expand its grocery and fast-moving consumer product services to over 200 cities via Farmiso (Meesho Grocery), a community group purchasing organization. Meesho aims to reach 100 million monthly transactional users by December 2022 and to be profitable before listing on the bourses over the next 12-24 months. Meesho wants to democratize Internet commerce for everyone while also boosting local businesses.
Final Words
In spite of a sea of challenges faced by this startup, Meesho continues to spread its wings across the nation. Founded with noble thoughts, this startup is sure to make waves in the coming years.
