Meesho lays off 150 employees from its grocery arm

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Bengaluru-based social commerce startup Meesho has laid off around 150 employees from its grocery arm, which integrated its grocery vertical in the core app and rebranded it to Meesho Superstore last week.

The Softbank-backed e-commerce firm in a blog post said, “As we look to boost efficiencies in the light of the integration, a small number of full-time roles and certain third-party positions on six-month contracts at Meesho Superstore were reassessed to remove redundancies with the core business.”

“To support those impacted by this restructuring, Meesho is offering severance packages and outplacement assistance to help them secure new opportunities outside the company. The redundancies do not impact any positions at the core Meesho marketplace business, where we continue to hire and grow talent,” added the blog post.

The firm expects to complete the integration of the grocery business by the first week of May.

“The integration will now provide the company’s 100 million+ Meesho users access to over 87 million active product listings across 36+ categories on a single platform.”

Meesho launched a pilot in Karnataka to make online grocery shopping affordable for first-time users. In less than 9 months, it has scaled its grocery offering to 6 states - Karnataka, Maharashtra, Telangana, Andhra Pradesh, Gujarat, and Madhya Pradesh.

This year, a number of startups including Unacademy, Furlenco, Trell, OkCredit and Lido have already laid off employees.

Founded by IIT Delhi graduates Vidit Aatrey and Sanjeev Barnwal in December 2015, Meesho started out as a social commerce platform. This business model typically has a three-sided marketplace - supplier, reseller, and end customer, where the reseller buys products from the supplier and sells it via platforms such as WhatsApp.

While Meesho started out with a thrust on social commerce, its share of direct sales has been going up, pitting it against players such as Flipkart and Amazon. It now derives 75 percent of its business directly from customers who come on its platform, while 25 percent comes from resellers.