Bangalore based e-commerce platform Meesho is planning to provide financial services to sellers registered on its platform in an effort to increase its profitability. The platform will function as a connecting link between the investors, and the sellers, who have capital requirements. Meesho will provide required data about the sellers to the investors, based on which the latter can make informed decisions.
“Meesho is planning to provide financial services to the sellers who are registered on the platform so that their capital requirements can also be fulfiled along with some revenue generation for the company” said Utkarsh Garg, director, Business at Meesho to FE. The decision has been taken in line with the aim of the company to achieve Ebitda breakeven point.
SoftBank-backed unicorn Meesho posted a net loss of Rs 3,247.8 crore in FY22, compared to previous year’s loss of Rs 498.6 crore.
“Meesho is aiming to reach to Ebitda breakeven by the end of this financial year and to achieve that we have also worked on reducing our marketing cost and have been successful in reducing it by around 90%. We abstained from involvement in the Indian Premier League (IPL) and from signing influencers like Deepika Padukone and Ranveer Singh which we used to do earlier”, said Garg.
He further said, “Meesho is also dwelling into enabling digitalisation where we share our data insights with the sellers for some specific charges so that they can bring improvements into the products that they are delivering to the consumers. These insights are based on the analysis of data collected by Meesho and informs the sellers about the preferences of the consumers.”
Speaking about the e commerce platform’s business model, Garg said, “We are mainly focussing on the consumers and sellers from tier- 2, 3 and 4 cities because our aim is to democratise e-commerce for underserved consumers and sellers. Unlike other e-commerce platforms which charge between 10-15% of the revenue as their commission, Meesho functions on 0% seller commissions. Because of this, there has been an increase of 79% in the number of sellers on the platform and the average seller revenue has witnessed a three-fold increase since 2021.”
He further added, “Gujarat has the largest seller base among all other states for Meesho. With 155,000 sellers registered on the platform, around 35-40% of the orders are being processed from Gujarat. In 2022, there has been 25% increase in the number of suppliers who have been onboarded with Meesho.”
Talking about the future prospects of the company, Garg said, “We believe that currently, Meesho is in a sweet spot as we have processed 91 crore orders in the year 2022, and have a user base of 120 million. With 220 million downloads, our app is the largest downloaded e-commerce app globally. We have seen a 2.5x y-o-y growth in the number of users. Market research reports suggest that 54% of new online consumers in the coming years will be coming from tier-2, 3 and 4 cities and 80%of our orders are materialising from tier-2 and 3 cities only.”