With an increasing number of small businesses onboarding the e-commerce bandwagon, the social commerce unicorn Meesho has registered a 7x increase in seller base since April 2021. Of the total 6 lakh registered sellers, around 70 per cent are from Tier 2 cities and beyond such as Amritsar, Rajkot and Tiruppur, among others.
Crediting this success to the zero commission and zero penalty policy, Lakshminarayan Swaminathan, CXO, Supply Growth at Meesho told Business Today, “We are aware of the challenges that business owners face while moving from offline to online. Our aim is to build a platform that promises ease of operations with visibility for all their products. Access to our large and diverse user base has helped our sellers log 3X growth in average revenue. Lakhpati (merchants selling goods worth Rs 1 lakh) and crorepati (merchants selling goods worth Rs 1 crore) sellers on the platform have grown by ~4X and ~5.5X, respectively, since January 2021.”
Claiming to be the first e-commerce company in the country to introduce zero per cent commission for sellers on the platform, Meesho does not segregate sellers based on tiers or private label or inventory-led play. The company has moved to an ad monetization-led business model akin to global majors which derive most of their revenue from pay-for-performance led ads.
To facilitate seller onboarding, Meesho has undertaken multiple initiatives to assist, such as a simple 3-step self-serving registration process, and small businesses with an active bank account and GSTIN number can sign up for free and register as a seller, post which they can upload their catalogue on Meesho’s Supplier Panel.
“Our business has evolved towards also serving consumers directly in the last year. But despite the growth in direct sales, our entrepreneurs continue to witness a strong trajectory in terms of sales and earnings. During the last quarter, our 16 million+ entrepreneurs saw their GMV more than double year on year. These entrepreneurs — most of whom are women — have been able to start up without capital, earn margins and, most importantly, gain financial independence,” added Swaminathan.
Claiming to average 2.4 million orders a day, the company refused to share the average order value. However, it aims to reach 100 million monthly transacting users by December 2022. “Of the ~700 million active internet users in India, only 216 million transact online. There’s a large chunk of people in tier 2+ cities who don’t transact online. We aim to bring these potential customers into the e-commerce fold,” said Swaminathan.
Founded in 2015, Messho entered the Indian unicorn club in April 2021 after raising $300 million in funding. The Series E funding round, led by SoftBank Group's Vision Fund 2, saw the valuation of the Bengaluru-based start-up rise to $2.1 billion from around $700 million in 2019. Valued at $4.9 billion, Meesho has a workforce of 1700 and plans to hire another 1000 this year, which will include doubling its tech team.
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