Meesho’s stock market debut has put a public-market stamp of approval on a business model that has long run counter to the dominant playbook of Indian e-commerce. After listing on December 10 at an issue price of Rs 111, the stock climbed to a peak of Rs 235 within two weeks, more than doubling and marking one of the strongest debuts in recent years.
The rally has drawn attention to Meesho’s value-commerce strategy, which prioritises low prices and cost efficiency over speed and premiumisation. Brokerages have likened the model to platforms such as China’s Pinduoduo and Southeast Asia’s Shopee, which focus on price-sensitive consumers and operate asset-light marketplaces. Meesho does not charge seller commissions, instead monetising through advertising, logistics, working capital financing and other value-added services.
Founded in 2015, Meesho began as a Shopify-style storefront aimed at small sellers in the unbranded products market. It soon found traction among resellers, particularly homemakers and small entrepreneurs, who used platforms such as WhatsApp and Facebook to sell products without holding inventory. Founders Vidit Aatrey and Sanjeev Kumar built tools that lowered entry barriers and minimised capital requirements, an approach that later shaped the company’s cost structure.
Zero commission emerged early as a core idea, though Meesho moved away from it for a period as scale and market conditions were not conducive. Once the business reached a level where it could sustain the model, the company reverted to zero commissions and has retained it since. According to its largest investor, Elevation Capital, this was central to building an efficient platform capable of serving value-conscious consumers at scale.
The approach helped Meesho onboard millions of small and micro sellers, many operating from their homes, creating a decentralised supply base that kept prices competitive. Monetisation was layered on gradually through advertising and services, without materially altering seller economics.
Pivot that Defined a Decade
A major shift came in late 2020, when the pandemic accelerated e-commerce adoption in smaller towns. As first-time shoppers began buying directly from the platform, Meesho decided to pivot from a reseller-led model to a consumer-first marketplace. Elevation Capital’s Mukul Arora recalled that Aatrey viewed the move as “existential”, arguing that only a decisive shift would allow the company to serve hundreds of millions of consumers.
That pivot has since underpinned Meesho’s financial trajectory. By the end of FY24, the company said it became the first horizontal e-commerce player in India to turn free cash flow positive, reporting FCF of Rs 197 crore. Including interest income, Meesho reported Rs 1,032 crore in the last twelve months free cash flow in FY25. UBS, in its post-IPO note, highlighted Meesho’s asset-light and negative working capital structure as key drivers of positive cash flows.
Valmo Advantage
Logistics has been central to this effort. To profitably deliver low-value items such as a Rs 200 kurta across 19,000 pin codes, Meesho built Valmo in 2022 as a technology layer that connects multiple third-party logistics partners. Rather than owning delivery infrastructure, Valmo orchestrates first-, mid- and last-mile operations, helping cut costs, particularly in non-metro regions. Valmo now handles a majority of Meesho’s shipments.
Meesho is currently the country’s third-largest online retail platform by gross merchandise value, with a FY25 GMV run rate of $6.2 billion. CLSA expects its market share to rise from 8.5% to 10% over the next six years, even as larger rivals see marginal declines.
The company is also experimenting with financial services and local logistics. UBS noted that while platforms such as Shopee have built sizeable and profitable loan books, the regulatory environment is tighter and Meesho’s lending efforts are still nascent. “That said, India’s regulatory environment is stricter, and Meesho is in the early stages of building a lending product,” the brokerage said, choosing not to factor fintech upside into its base case.
With 286 million monthly active users, the highest among Indian e-commerce peers, Meesho has built scale by focusing on tier-2, tier-3 and rural markets. What was once seen as a constraint is now viewed as a strategic edge. Analysts said that the challenge ahead will be to deepen monetisation while preserving the affordability that underpins its appeal.