Meesho's E-commerce Strategy Overview

Meesho's Revolutionary E-commerce Model

• Meesho is a highly successful Indian e-commerce startup, enabling millions of small sellers to sell nationwide.
• It's achieved profitability while competitors like Amazon and Flipkart have struggled with high average order values (AOVs) and high costs.
• Meesho's AOV is significantly lower (₹360-370) compared to Amazon and Flipkart (~₹1,000).
• 65% of Meesho's products are priced 20-30% lower than competitors.
• Customer retention rates are remarkably high (80%).
• Despite high competition, Meesho's active user growth was 32% year-on-year in December 2023, exceeding Amazon's (13%) and Flipkart's (21%).

Market Gap and Pain Points

• The Indian e-commerce market is underdeveloped, with online penetration at only 8% of the overall retail market, despite substantial growth potential.
• Early e-commerce platforms mostly focused on tier-one cities, leaving tier-two and -three markets largely untapped.
• Meesho's founders identified three key pain points:
  • High selling costs for small businesses (30–40% commissions, fees, and GST).
  • Low e-commerce penetration in smaller cities, due to lack of awareness and trust.
  • Long payment cycles (19 days) impacting cash flow.

Meesho's Origin and Evolution

• Meesho was founded in 2015, with a vision to democratize internet commerce by serving small sellers in tier-two and -three cities.
• Initially, it operated on a B2B2C model using WhatsApp groups, but the model evolved into a direct-to-consumer (B2C) platform following increased e-commerce adoption during and after the Covid-19 pandemic.
• It now has over 1.8 million sellers offering over 120 million products.

Meesho's Unique Features

• Focuses on tier-two and -three cities.
• Low selling costs, offering lower commissions than competitors.
• Empowering small businesses through simplified payments, ease of use and reduced payment cycles.
• Competitive pricing, appealing to a broad customer base.

Meesho's Business Model

• Zero commission for sellers, only a small fulfillment fee.
• Revenue from performance-based advertising (CPC, CPV, CPA, CPM).
• Maintains a fair split between paid and organic visibility for all sellers.
• Provides support for sellers through tools like price recommendation and seasonal product insights.
• Shifted the payment cycle to only 7 days from 19.
• An asset-light model, outsourcing logistics for significant cost reduction.
• No private labels or seller tiering.

Competitive Responses

• Competitors like Flipkart (Flipkart Shopsy) and Amazon (Amazon Bazar) have attempted to mirror Meesho's innovative strategies.

Business Lessons from Meesho

• Blue Ocean Strategy: Identify and target underserved markets. Meesho focused on tier-2 and -3 cities.
• Untapped Potential: Capitalize on neglected areas with significant market potential.
• Trust and Technology: Build trust by implementing technological solutions, e.g., barcodes, quick refunds.
• Avoid Common Pitfalls: Avoid competing with sellers and maintaining a simple business model.
• Optimized Logistics: Reduce costs by strategically outsourcing logistics and scaling.
• Adapt and Understand Market Needs: Understand and prioritize the customer's value proposition (value over convenience).

Meesho's Marketing Tactics

• Influencer Collaborations: Working with social media influencers to reach wider audiences.
• Social Media Marketing: Actively engaged on platforms like Facebook, Instagram, and Twitter. Focused on advertising, engagement, and promotional content.
• Referral Programs: Creating incentives for user referrals.
• Festive Sales and Discounts: Running special promotions during festivals.
• Celebrity Endorsements: Utilizing celebrity endorsements to boost brand visibility.
• User-Generated Content: Encouraging user-created content to promote the platform and foster community.
• Targeted Ads: Utilizing targeted ads to reach specific demographics.
• Brand Campaigns: Implementing brand campaigns to heighten brand awareness.

Explore Meesho's innovative e-commerce model that empowers small sellers in India. This quiz covers Meesho's competitive advantages, market gaps, and customer retention strategies compared to industry giants like Amazon and Flipkart. Test your knowledge of this revolutionary startup's impact on the Indian retail market.