Meesho Success Story: From Reseller App to 793 Crore Revenue Business

Introduction

Meesho, an online platform for reselling goods, is likely familiar to many. Known for its user-friendly interface and affordable prices, it has gained popularity among both buyers and sellers. It ensures quick, secure transactions and offers cost-effective shipping and return options.

Based in Bangalore, the platform aims to enable individuals to start their own businesses without needing to invest money upfront. The company boasts a vast network, with over 20,000 suppliers from more than 500 locations and over 2 million resellers. Operating on a commission-based model of around 10–15%, sellers can make a profit by adding a markup to each sale.

The name "Meesho" comes from Hindi, meaning "My Shop" or "Your Own Store," reflecting its mission to empower entrepreneurship without financial barriers. It strives to provide an inclusive environment where anyone can kick start their business journey.

 

The Shift to Online Shopping

The outbreak of the pandemic has further accelerated the reliance on online purchasing platforms. Many people have turned to online shopping out of necessity, leading to a surge in demand for ecommerce services. This surge has also presented an opportunity for aspiring entrepreneurs to establish their own online empires.

 

 

Revolutionizing Online Reselling

One platform that stands out in the online reselling industry is Meesho. Founded in 2015, it has emerged as a leading player in the Indian market, offering a unique opportunity for individuals to start their own reselling businesses without any upfront investment.

 

From FASHNEAR to Meesho

Meesho's journey began under the name FASHNEAR in 2015. Initially focused on local fashion goods, the founders, Sanjeev Barnwal and Vidit Aatrey, soon realized the limitations of their business model. They pivoted towards creating a platform that addressed the needs of both suppliers and resellers, leading to the birth of Meesho.

 

 

 

Starting Up Struggles

 When the platform began, online commerce was on the rise, but challenges like limited supply, shipping issues, and transaction alternatives persisted. The CEO's strategy of supporting small businesses meant they never stored items in their warehouses. However, during the COVID-19 lockdown, accessing supplies became tough, despite slight government easing. Many vendors relied heavily on the platform for income, which took a hit during the pandemic. To address this, the focus was on establishing a robust logistical network, but navigating different state regulations on vehicle movement added to the challenge.

How Meesho Works

It operates as a bridge between manufacturers and resellers. Suppliers list their products on the platform, which resellers can then promote through social networks like WhatsApp, Facebook, and Instagram. This model allows independent resellers to earn a commission without the need for upfront investment.

Empowering Women Entrepreneurs: 

One of its key initiatives is empowering women entrepreneurs. Many of the resellers on the platform are women who operate their businesses from home. It provides them with the tools and support they need to succeed in the ecommerce space.

 

From Startup to Unicorn

Since its inception, it has experienced rapid growth, evolving from a social commerce startup to a unicorn company. By focusing on customer needs and continuously innovating its services, it has solidified its position as a market leader in online reselling.

 

Meesho's Superstore and Mall

It revamped Farmiso into Meesho Superstore on April 5, 2022, focusing on essential needs in Tier 2 markets. They plan to merge the groceries division into the main platform by May 2022, expanding to 6 states in 9 months and aiming for 12 states by 2022's end. This aligns with the trend towards super apps dominating digital markets.

Despite just 0.5% of grocery sales being digital, it sees immense potential. In FY20, they earned INR 341.6 crore with operational revenue at INR 307 crore. Expenses were INR 657 crore, resulting in a loss of INR 306.70 crore. FY21 saw a 2.6X revenue increase to INR 793 crore, with non-operational revenue at INR 48.5 crore. It aims to keep growing after two years of social commerce sector expansion.

 

 

Meesho’s Primary Revenue Models

Commission

Its main income stream comes from commissions charged to retailers. When a seller on the platform sells a product, they pay a commission based on a percentage of the sale. This commission-based model is similar to that of other e-commerce giants like Flipkart and Amazon. Notably, suppliers are exempt from paying commissions on certain product categories, and no commission is charged to resellers.

Additional Revenue Channels

Logistics: It charges fees for the logistics services it offers to suppliers. The company's team is focused on reducing logistics costs to improve seller profitability.

Advertisements:

 Another source of income comes from advertisements. As the platform attracts more vendors, merchants who wish to promote their products must pay a fee for advertising.

Data Monetization:

Recognizing the value of data, it also earns revenue from it. The company ensures compliance with privacy regulations and only sells information that does not compromise anyone's privacy.

Strategic Partnerships

It has partnerships with government agencies, research institutions, and other companies to further its mission of democratizing ecommerce. These collaborations enable it to reach new audiences and enhance its services.

Meesho - Growth

It believed in Elenas' business and supported them with money twice. First, they gave $2 million in October 2020. Then, on March 4, 2021, they gave another $6 million. This shows their trust in Elenas to do well.

 

Meesho - Funding and Investors

It got a lot of money from investors. In total, they got $1.1 billion. Here's how they got the money:

- On October 13, 2023, they got $52.5 million from Westbridge Capital.

- On October 20, 2021, they got some money from Trifecta Capital Advisors.

- On September 30, 2021, they got $570 million from B Capital Group, Fidelity Management, and Research Company.

- On April 5, 2021, they got $300 million from SoftBank Vision Fund.

- On August 12, 2019, they got $125 million from Prosus & Naspers.

- On June 14, 2019, they got $25 million from Meta.

- On November 5, 2018, they got $50 million from DST Partners, RPS Ventures, and Shunwei Capital.

- On June 7, 2018, they got $11.5 million from Sequoia Capital India.

- On October 12, 2017, they got $3.4 million from Elevation Capital.

- On August 18, 2016, they got $120K from Y Combinator.

 

 

Future Plans

Looking ahead, it has ambitious plans for growth. The company aims to go public in the next 12 to 18 months, signaling its confidence in its business model and vision for the future. With plans to onboard millions of small businesses, it is poised to continue its journey of empowering entrepreneurs in the online space.

 

Competitors

Meesho faces rivals like:

• Elenas
• SimSim
• Bulbul.tv
• CityMall
• ALIPPO
• Huboo
• Magento
• Volusion
• Shop101
• DealShare
• Drop
• GlowRoad

 

Conclusion

In conclusion, Meesho's success story serves as a testament to the power of innovation and entrepreneurship in the digital age. By providing a platform for individuals to start their own businesses, it is not only driving economic growth but also empowering communities and transforming lives. As the e-commerce landscape continues to evolve, Meesho remains at the forefront of change, shaping the future of online reselling for generations to come.

 

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