The Financial Express
The seller base of SoftBank-backed Meesho, an e-commerce marketplace, has now grown to 1.1 million from about 830,000 a year ago. Now Meesho’s seller base is at par with that of Amazon and Flipkart.
While Meesho took about eight years to amass over a million sellers, other giants like Flipkart took over 12 years to reach the same mark last year, while Amazon took around nine years to grow its seller base to 1.1 million. Analysts, however, said Meesho wasn’t exactly comparable to larger players like Flipkart and Amazon, primarily because of its low average order value (AOV) of around `400. This is because the company isn’t too focused on high-ticket products like mobile phones and the like, where Flipkart and Amazon hold an over 90% market share.
Utkrishta Kumar, CXO, business at Meesho, told FE that the company’s 0% commission policy, its stance to stay away from private label play, which ensures it isn’t competing with sellers on its own platform, among several other strategies, have helped it lure more sellers over the years.
Meesho’s 1.1 million sellers have around 100 million active product listings across 30 categories. A majority, or about 60%, of the company’s orders come from the fashion category alone, while all other categories, like beauty and personal care, consumer electronics, or non-fashion segments account for the remaining.
“Fashion has been our mainstay at Meesho, but as the company grows, we have been working on expanding our footprint in other categories like books, pet supplies, stationery, footwear and several others and are confident that the share from non-fashion products will continue to grow over the years,” Kumar said.
Going forward, Kumar is hopeful that Meesho will be able to bring all the 65 million micro, small and medium enterprises (MSMEs) on its platform in the next couple of years. The company has “tapped onto well established resellers on Facebook groups, housewives and local fashion influencers, and delivered a seamless user experience through features like a marketplace for low-end smartphones, ability to set prices and management of delivery to end users,” a report jointly published by Boston Consultancy Group (BCG) and The Indus Entrepreneurs (TiE) earlier this month, said.
Meesho caters mainly to the Tier 2 and beyond regions. In fact, over 70% of its business comes from these regions, the report added.
Despite the focus on a customer base that has a relatively lower spending capacity, Meesho’s return rate was only around the 10-12% range, that compares with the e-commerce industry’s average return rate of around 15-18%, according to industry sources.
“The return rates on our platform continue to stay very low. In fact, our return rates are lowest in the ecosystem,” Kumar said. This has helped Meesho have “an extremely low customer acquisition cost, as Meesho customers felt a sense of familiarity and trust”, the report added.
Meesho has raised over $1 billion from investors like Prosus, Facebook, Sequoia, Y Combinator and several others, and is valued at around $5 billion.
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