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Meesho gears up for bigger e-commerce play, takes on Flipkart, Amazon in festive sales

Social commerce company Meesho, which pivoted to an e-commerce marketplace, is trying to grab a share of festive sales. Its first branded flagship sale event takes place along with those by behemoths Flipkart and Amazon.

October 05, 2021 / 01:44 PM IST
Meesho, earlier last week had raised $570 million in Series F round from Fidelity Management and B Capital. The company is now valued at $4.9 billion. (Image: Shutterstock)

Meesho, earlier last week had raised $570 million in Series F round from Fidelity Management and B Capital. The company is now valued at $4.9 billion. (Image: Shutterstock)

Meesho, a recent entrant to the e-commerce club, gets its first branded flagship sales event off the ground October 6-9 with an eye on the festive pie.

Several e-commerce companies have announced festive sales in the first week of October. Flipkart’s flagship Big Billion Days sale and Amazon’s Great Indian Festival started on October 3.

With its Maha Indian Shopping League, Meesho expects to clock three times more daily orders by connecting customers to about 250,000 sellers and over 700 product categories.

“We are excited to reimagine ‘Bharat’s’ festive shopping experiences with the first edition of Maha Indian Shopping League. To truly democratise internet commerce, we have lowered entry barriers and improved ease of business for sellers, enabling more local businesses across the country to join us and sell online,” said Vidit Aatrey, founder of Meesho.

In the past six months, Meesho’s monthly transacting users have grown almost three times while monthly orders rose over two times. About 40 percent of Meesho’s new users during this time were also first-time e-commerce users, the company said.


Meesho raised $570 million from Fidelity Management and B Capital last week and is now valued at $4.9 billion. This is the company’s second round of funding this year. It became a unicorn – a startup valued at $1 billion or more – after raising $300 million from investors led by SoftBank Group in April.

Big league

Meesho recently pivoted from a social commerce startup with a reseller model to an e-commerce marketplace. The company now competes with Amazon and Walmart-owned Flipkart, which are also trying to tap small-town consumers, just as Meesho.

According to Megha Agarwal, VP and GM-user growth, at Meesho, the company has an edge when it comes to tier II cities and beyond, given its expertise in these markets.

“Meesho from day one has been very focussed on solving the problems for tier II and beyond markets and we have tailormade our solutions for consumers in smaller towns,” she said.

Meesho’s reseller model allowed users to send product listings through WhatsApp and other social media platforms to acquaintances and friends and get a share of the revenue from any transactions. However, consumers started flocking to the platform, drawn by its low prices, and so it decided to launch an e-commerce marketplace, Agarwal said.

Festive preparations

Meesho claims it offers lower prices than rivals under its festive strategy.

“Almost 80 percent of our products are already better priced than competitors, while also being priced 20-25 percent lower than the products on other e-commerce marketplaces,” said Agarwal.

Early this year, the company announced a zero percent seller commission model, which it said helped a 10x growth in new sellers joining Meesho.

Ahead of the festive season, Meesho onboarded over 100,000 sellers with a bevy of new initiatives including free ad credits and zero return shipping charges on the first 30 orders. The company allows sellers to create an online storefront on its platform that can be shared on social media. It is also doling out sales offers.

“Every hour, users will have an opportunity to win prizes ranging from a premium car, total cash rewards of Rs 1 crore, Meesho credits worth Rs 15 crore, to gold coins and appliances worth over Rs 2 crore,” the company said.

Social commerce

Most companies in the social commerce segment have been figuring out ways to crack the small-town market. According to a Bain & Co. report last year, only 160-190 million of India’s 572 million internet users transact online. The main reason for the reluctance to shop online, revealed the report, is lack of trust about finding the right products.

While Meesho had a reseller model, others like Dealshare have a group-buying model. In another model, tapped by companies like Trell, users are sold products through influencers.

As per the Bain & Co. report, social commerce companies in India clocked $1.5-2 billion in gross merchandise value in 2020, which is expected to grow to $16-20 billion in five years.

Meesho, according to a recent Jefferies report, has so far been the frontrunner in social commerce.

“Meesho has seen strong growth hitting a run-rate GMV of $1.4 billion within six years of inception. Order volumes saw a 400 percent year-on-year growth to 20 million in February 2021 over the normalised pre-Covid base of February 2020. GMV as well as monthly active users also saw a 5x and 9x YoY growth in February 2021,” it said.

Now, the challenge for Meesho will be to replicate this success in e-commerce while competing with Amazon and Flipkart.
Devika Singh
first published: Oct 5, 2021 01:27 pm

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