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Meesho to join Open Network for Digital Commerce; plans to take on Amazon, Flipkart with branded offerings

Meesho Mall move is significant as the Bengaluru-headquartered company has previously only focused on the non-branded segment and the price-over-convenience market

May 20, 2022 / 11:50 AM IST

After e-commerce bigwigs, social commerce player Meesho is now looking to join government-backed Open Network for Digital Commerce (ONDC) and has started to work on its new product called Meesho Mall, people aware of the matter said.

ONDC is a freely accessible platform that aims to democratise e-commerce. Unlike the platform-based model, it is not be owned or controlled by a single entity.

The firm will look to tie up with affordable consumer brands for Meesho Mall and is already in talks with a few. This move is significant as the Bengaluru-headquartered company typically focuses on the non-branded segment and aims at the price-over-convenience market by focusing on customers who spend less than Rs 500. 

Meesho Mall will be competing with Flipkart and Amazon directly. So far Meesho has been competing with Flipkart's social commerce app Shopsy, which was launched last year. The competition though also intensified as Meesho started deriving 75 percent of its business directly from customers.

The firm did not respond to queries about Meesho Mall.

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“Meesho Mall will work similar to Paytm Mall. A separate team has been set up for this project,” said one of the sources cited above.

“It is still at the ideation stage. As of now it’s pitched as a separate website from Meesho’s current website and may or may not be part of ONDC, depending on how successfully ONDC takes off,” he added.

Meesho is currently pitching to brands for onboarding, according to a few people in the know. Moreover, through this initiative the firm will be aiming at launching its own private labels, which is its long-term strategy.

Responding to e-mailed queries on ONDC, Dhiresh Bansal - Chief Financial Officer – Meesho, said, “ONDC is a game changing initiative around bringing in a large network of buyers, suppliers as well as enabling the expansion of ecommerce business thereby bringing in more masses online.”

“We also feel that ONDC can reduce the barriers for sellers to come online as well as for buyers. Besides tapping into new users, ONDC will also enable platforms with sizeable business-to-business verticals to tap into the seller side of the ONDC network to supply goods.

“As ONDC is at an early stage, we are monitoring the developments that are taking place and waiting for further details to emerge. However, we think that this can prove to be the backbone of e-commerce in India, same as UPI has been for digital payments.”

The SoftBank-backed unicorn is also in cash reserve mode as it has instructed its teams to reduce customer acquisition cost. The company’s monthly cash burn is currently $35-40 million.

Last year in an interview with Moneycontrol, Vidit Aatrey, founder & CEO of Meesho, said the firm clocks three million orders per day on average.

Meesho raised $300 million and $570 million in two rounds last year and was last valued at $4.9 billion.
Sanghamitra Kar
first published: May 20, 2022 11:50 am
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