The share of Meesho’s orders handled by its in-house logistics arm, Valmo, has remained at around 50% for three consecutive quarters, suggesting the e-commerce platform’s push to internalise deliveries may have reached a plateau.
On the company’s post-earnings call, chief financial officer Dhiresh Bansal declined to indicate whether Valmo’s share would rise further. “There is no specific guidance on what Valmo’s share would be at any point in time,” he said.
Valmo’s share has remained broadly unchanged since peaking at over 60% around the middle of last year, when it briefly overtook Delhivery as the largest carrier of Meesho’s shipments.
The shift marks a change in the company’s narrative. Since its launch in February 2024, Valmo rapidly expanded from handling just 2% of Meesho’s shipments in FY23 to around half by December 2024. When Meesho filed for its initial public offering (IPO) late last year, it positioned Valmo as a key competitive differentiator.
Its rise beyond the 60% mark had fuelled expectations that Meesho would continue increasing insourcing, moving closer to the captive logistics networks of Amazon and Flipkart, which JM Financial estimates handle 85-90% of their shipments internally.
Instead, Valmo’s share has flattened. Meesho now presents the platform less as a vehicle for progressively taking over deliveries and more as a tool to benchmark logistics costs and keep third-party delivery partners competitively priced.
The plateau also lends support to a long-held view among third-party logistics players such as Delhivery that captive delivery networks are structurally more expensive than independent logistics providers, even after accounting for courier margins.
Unlike conventional logistics operators, Valmo aggregates spare capacity from small local delivery partners through software rather than investing heavily in trucks and sorting hubs. That even this asset-light approach has struggled to move beyond half of Meesho’s shipment volumes highlights the economic challenges of large-scale insourcing.
The company’s disclosures also underscore the cost pressures. During the quarter, Meesho absorbed higher fuel costs and increases in minimum wages in several states, while treating these as structural cost increases that were passed on to sellers. It is also making provisions for the welfare levy under Karnataka’s gig workers’ welfare law.
Analysts said such costs typically weigh more heavily on companies operating their own delivery networks than on asset-light aggregators.
Valmo’s middle-mile and last-mile logistics operations are now housed under its wholly owned subsidiary, Valmo Transportation Private Limited.
The implications extend beyond Meesho. Jefferies estimates that Meesho contributes about 16% of Delhivery’s revenue and has identified insourcing as the biggest risk to the company’s express parcel business. Shadowfax, which listed in January, derives nearly half its revenue from Meesho. A cap on Valmo’s share, therefore, eases a key overhang for listed logistics companies.
For Meesho, however, the plateau does not necessarily signal a setback. Its contribution margin improved to 4.6% of net merchandise value (NMV), the highest since listing. At the consolidated level, the company remained loss-making, although losses narrowed significantly. Net loss stood at Rs 133 crore in the June quarter, compared with Rs 289 crore a year earlier and Rs 166 crore in the preceding quarter. Cash and cash equivalents stood at Rs 6,521 crore at the end of June.