Softbank-backed social commerce firm Meesho saw sales double during its first festival season sale, largely driven by first-time internet buyers from small cities of the country, the company has said.
A recent entrant to the e-commerce club, Meesho’s Maha Indian Shopping League was held from October 5 to October 10, coinciding with Amazon’s Great Indian Festival and Flipkart’s flagship Big Billion Days sale that opened during the period.
“Looking at September-end or October 1 kind of a (period) over the course of five-day sale, we were more than 2x everyday but if you compare it to a timeline which is non-festive, the numbers will be much higher,” Utrkrishta Kumar, Vice President and General Manager for Business, told Moneycontrol in an interaction.
According to the company, nearly 60 percent of the demand during Maha Indian Shopping League was driven by Tier-4 and beyond markets, including remote locations like Khawzhwal in Mizoram in the northeast and Sopore in Jammu and Kashmir in the north.
“More than 50 percent of our new users are placing their first order ever. We can confidently say that we are bringing Bharat to internet commerce.”
Meesho runs a three-sided marketplace with suppliers, resellers and the customer. The reseller buys goods such as unbranded fashion items from the supplier and sells them through social media platforms such as WhatsApp and Instagram.
While Meesho started out this way, its share of direct sales is also going up, pitting it against Flipkart and Amazon.
Meesho largely focuses on unbranded, long-tail fashion at affordable prices. It is also looking to tap the Tier 2 and beyond market unlike the conventional e-commerce companies that started off with the metros.
Its growth comes at a time when social commerce is expected to become a $7-billion opportunity by 2025.
In a recent report, consultancy firm Redseer said social commerce is likely to account for at least 5 percent of the overall e-commerce market by the fiscal 2025.
E-commerce is also expanding in India with global players such Shopee eyeing the market. According to reports, Shopee has already started recruiting sellers in India.
In September, Grofers co-founder and former chief technology officer Saurabh Kumar also announced plans to venture into the e-commerce, focussing on quick delivery.
"Vision is to democratise internet commerce for everyone in the country and get to 100 million sellers on Meesho," said Kumar.
The company claims to have 2.5 lakh sellers. It doesn’t make money by charging commissions from sellers but through seller ads network.
“While we definitely look out for competition in terms of understanding the broader landscape, the way we prioritise things come from users directly,” Kumar said.
As long as the company focussed on selection, pricing, the overall user experience or making an easy-to-use app, “we shouldn't be thinking too much into which players are going to enter into the market and how the ecosystem is going to change”, he said.
Like its bigger rivals, Meesho, too, has spread out its sale events through the festival season that typically runs from October-mid December. The next sale is expected to begin in the coming week.
The company last raised $570 million in its Series F round led by Fidelity Management and B Capital, more than doubling its valuation to $4.9 billion in September.
Redseer has predicted that the e-commerce industry will make $9 billion gross merchandise value (GMV) during the entire month of festivities.
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