Tuesday, June 28, 2022
No menu items!
    HomeBusiness‘Around 50% of all business on Meesho last year came from new...

    ‘Around 50% of all business on Meesho last year came from new Internet users’


    Founded in 2015 by Sanjeev Barnwal, and Vidit Aatrey, the start-up initially started off on a social commerce model that employed millions of resellers, out of which 80% are women.

    Almost half of all transactions on e-commerce marketplace Meesho in calendar year 2021 came from users who were new to the Internet. Of this, some 20% were trying out online shopping for the first time ever, a top company executive told FE.

    Meesho, which currently operates a pure e-commerce marketplace and a social commerce app, on Thursday said that it recorded 5.35 million orders during its one-day sale event on June 5, wherein the majority of the orders came from cities and towns beyond the Tier-2 geographies. Meesho usually records around a million orders on a daily basis.

    The start-up also said that nearly 100,000 sellers participated in the recent sale. Around 75% of the participating sellers came from Tier 2 and 3 regions, including deeper corners of India such as Bathinda, Haldwani, Solapur and Tirunelveli, among others. Participating sellers witnessed a 217% increase in orders during the sale event compared to usual business days, the company said.

    Meesho’s CXO for business operations, Utkrishta Kumar told FE that online shoppers from non-metro cities demonstrate a distinct buying pattern and choices when compared to metro cities.

    Hence, the platform has been focusing on adding new Internet users as a unique strategy to drive up its order volumes. Industry estimates show that out of the 600 million Internet users in India, only 70-80 million of them shop online on e-commerce and other platforms.

    “There are multiple problem buckets that we have identified while solving for first time Internet users. Firstly, we focused on researching and providing users with the right selection of product categories that they are likely to buy. Then we also solved for pricing and affordability wherein our 0% commission model for sellers helped us a lot in bringing down the listing price thereby converting more first-time users,” Kumar added.

    Meesho currently has over 34 categories on its platform which mostly stock long-tail consumer goods. In the last six months, the platform also launched new categories such as sports and fitness, pet supplies, office and stationery, books and music as well as health and wellness.
    The spike in online orders from new Internet users on Meesho comes at a time when order volumes from small tier towns and cities have surged, especially in the last two years.

    India’s e-commerce business grew by 77% between 2020 and 2021 with transactions from Tier II and III cities higher than ever, said a study conducted by data intelligence company Bobble AI. The study also found that transactions in Tier-II cities such as Jaipur, Lucknow, Guwahati, Mysuru, Kochi, and Bhubaneswar are at an all-time high, rising 82% from the year-ago period.

    Founded in 2015 by Sanjeev Barnwal, and Vidit Aatrey, the start-up initially started off on a social commerce model that employed millions of resellers, out of which 80% are women.

    The model is centred around drop-shipping, a retailing model where a seller doesn’t have to keep any inventory. They instead ‘resell’ products from suppliers who store their inventory in warehouses or factories.

    These resellers usually sell to a recurring and loyal base of customers, who find interest in long-tail products. The idea is to sell large volumes of rare products to customers, hence the supply of such products comes from specialised manufacturers.

    However, Meesho recently pivoted into a pure e-commerce marketplace model and slashed commissions to zero for all sellers in mid-2021.

    It currently claims to have 44 million active product listings on its marketplace. In April 2021, Meesho also announced its foray into grocery delivery services with a plan to expand to more than 200 cities.

    “While we started with the social commerce based reselling model, the evolution to (direct e-commerce) has increased as our distribution across the country. We have seen this shift happening organically right and as of today, both the models are active on our platform,” added Kumar.

    Last month, Meesho’s co-founder Sanjeev Barnwal told FE that Meesho is also exploring the government’s nationwide logistics service named Open Network for Digital Commerce (ONDC). It is projected to turn e-commerce into an open digital infrastructure instead of being dominated by large marketplaces such as Amazon, Flipkart, and others in India.

    The company has so far raised $1.1 billion in funding with the last round of $570 million raised in September 2021 from SoftBank, Prosus Ventures, Fidelity Investments, Facebook co-founder Eduardo Saverin’s B Capital and others, as per data from Crunchbase, at a reported valuation of near $5 billion.

    Meesho had reportedly laid off 150 people from its grocery business ‘Meesho Superstore’ amid its integration into the main app in April 2022.

    Related articles


    Please enter your comment!
    Please enter your name here

    Stay Connected


    Latest posts