🛒 Meesho v/s Flipkart: Who will Win?

So far, the e-commerce world has been ruled by two giants. But now an underdog has come to challenge their rule. Here's how.

"Started from the bottom, now we're here."

This sentence perfectly summarises Meesho's journey.

The company, which began its journey in 2015 as a social commerce platform, became a unicorn last year. 

It started out with a motive of helping the people of India, especially women, but is now disrupting the country's e-commerce scene and giving tough competition to Flipkart. Wondering how such a small player managed to do so? 

ReadOn!

Meesho's Motive

We mentioned that Meesho is a social commerce app. Wondering what's that? 

A social commerce app directly leverages social media to sell products instead of just relying on its own marketplace.

Confused? Okay, let us explain this while we're explaining Meesho's business model.

So, what Meesho does is connect large sellers and companies to small resellers (people like you and us). These resellers in turn sell the larger sellers’ products to customers via Facebook or WhatsApp. The moment customers place an order, the resellers notify the wholesale clients, who then dispatch the items. All that the reseller is required to have is good taste. They don't need to worry about holding inventory. 

This is a win-win situation for all. It gives many wholesale retailers an online presence and it allows many to start a business with zero investment. Great, right?

And guess who has benefitted the most from it? Indian women. Over 9 million women are currently reselling products and building wealth for themselves thanks to Meesho.

But Meesho is not content with just helping these women entrepreneurs. It wants to help small businesses as well by bringing over 100 million small businesses and merchants to its platform (If you're interested in learning more about Meesho's business model, you can read our in-depth article here).

Meesho's unique business model has attracted many big-shot investors including SoftBank, Facebook, Fidelity Management and many others. It now has a valuation of nearly $5 billion!

This funding has allowed it to grow its operations putting it directly in competition with the biggies: Amazon and Flipkart. Here’s a look at how Meesho has grown since 2020.

Source: TechCrunch

The E-Commerce War

So far, Amazon and Flipkart have ruled the landscape of Indian e-commerce. They have managed to sideline most other e-commerce apps like Snapdeal and ShopClues. But Meesho has the potential to disrupt this duopoly. And its growing eminence is worrying Flipkart as its market share is now at stake.

Wait, why just Flipkart though?

You see, Amazon doesn't just sell products to us. It sells convenience.

Broke your phone? Get one delivered in just a day. Thanks to Prime. No other e-commerce app in the country offers this service right now. 

Flipkart meanwhile is trying to focus on providing both convenience as well as value. It has its feet in both boats and risks drowning. It is trying to provide fast deliveries while trying to win over customers in Tier-2 and Tier-3 cities by offering cheaper products. 

But this has now become Meesho's home ground. And Meesho is able to provide products at a cheaper rate than Flipkart. Why?

Because it is solely focusing on reducing the cost. Customers know that their products may come late but they will be cheap and good. But Flipkart’s focus on convenience doesn’t allow it to sell products for cheap.

 And Flipkart knows this. So, allegedly it has created a war room to focus on its competition with Meesho. Not just that, it apparently also asked third-party shipping companies like Delhivery to not prioritise Meesho.

However, this strategy is unlikely to work out. Because unlike Flipkart, which uses these third-party shippers for only a fifth of its orders, Meesho uses these companies for 40%-50% of its shipments. So, these companies are more likely to side with Meesho. 

Flipkart obviously doesn't just have one trick up its sleeves. To compete with Meesho, the company launched its own social commerce app called Shopsy last year. The app has been somewhat successful, amassing 2.5 lakh sellers and 51 lakh users in just 100 days.

But where Flipkart is taking the Meesho approach to increase sales, Meesho is doing the opposite. It is using the techniques used by these big e-commerce giants to compete with them. 

Last year, like Flipkart and Amazon, Meesho also launched a four-day festive sales event. This was a massive success, boosting Meesho's user base by 750%! The move has also increased Meesho's direct sales. 75% of its sales now directly come from its e-commerce platform.

And it is now taking a cue from Chinese shopping apps and building a live streaming shopping platform. Umm, what's that?

A live shopping platform is kind of like the telemarketing ads you see on TV. You can place orders for products while the marketers are endorsing them. But an online shopping platform is often more glamorous than these telemarketing ads. It usually includes influencers and celebrities endorsing the products.

Many Indian brands like Myntra are also venturing into live commerce now and Meesho's new venture shows that it means to keep up with the already established e-commerce giants. 

Now it seems that the only way for Flipkart to take over Meesho's market share is by drastically reducing prices. But will it be possible if it also wants to provide convenience?

Who will ultimately win the war? We'll be watching this battle to tell you the results.

Until then, ReadOn!

P.S. Here’s another reminder that we recently launched our calendar to bring more hope to your desks this year.

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