Meesho: The Desi Twist to Social Commerce
"Start your business from home with zero investment" - Meesho, connecting resellers across the country. Learn all about the company :)
Running a small business comes with its own hassles. For my mom, who loves selling sarees purchased from manufacturers in Surat, it was a hassle to manage inventory, click pictures of the beautiful sarees and suits and then share it with her friends on WhatsApp and Facebook to sell them. And then came the hassle of getting it delivered (I remember carrying 20 sarees to an aunty once, in an auto – my Mom wouldn’t pay for my taxi fare. No wonder I ended up working for a logistics company). And, don’t even ask about the payment bit. She doesn’t believe in the concept of modern banking. She loves cold, hard cash.
Tired of taking care of the daily chores, she started to find managing everything laborious and irritating. She loved the selling part of it, engaging with her customers, talking to other sellers about the latest trends and all, but the other aspects of running the business was taking a hit on her enthusiasm.
She asked me to show her a solution (pun intended).
That’s when I came across Meesho.
Let’s dig deeper into how Meesho is empowering millions of people and making them self-dependent.
Understanding the Business Model
Let me take you back in time.
You just had an amazing day at school and can’t wait to tell your Mom about it. You start excitedly, but she cuts you short.
“Put your tiffin and water bottle in the sink, and come have lunch. Then we can talk.”
Damn! You realise that you have lost your Tupperware tiffin. For the next two-hours, your hungry self has to listen to your Mom tell you about the Tupperware’s origin story, the exact colours of the previous lunch boxes you have lost and how you are the most irresponsible child on the planet.
I, for quite some time, genuinely believed that Maa values her Tupperware more than me.
Tupperware sells its products by leveraging social-network of homemakers, and kitty-parties are the perfect excuse for these women to showcase and sell Tupperware tiffins and water bottles to their friends. It doesn’t have physical stores and all, and only sells through these “resellers.”
Meesho does exactly this, and a couple of more cool things – digitally.
Meesho is an online marketplace that connects sellers to buyers over social media platforms such as WhatsApp and Facebook.
It focuses on small business players (called resellers) who don’t have an online presence.
“Homemakers, businesspersons, boutique owners, teachers, students and professionals are among our top Resellers.” – quotes Meesho on its website.
Cheaper smartphones and internet plans have helped resellers (like Maa) take their business online. They can now reach out to more customers, constantly engage with them and gather instant feedback. All this comes with the re-sellers’ personal touch and charisma. And, it wouldn’t be possible to do this at scale if technology was not involved.
Tech-first Solutions
The basic essence of a start up is to solve a problem. Meesho strives to solve the following problems that resellers used to face while making an online sale:
managing real time inventory;
enabling easy description and details about the product (displaying products on WhatsApp in different sizes with different price tags confuses the buyers);
dearth of suppliers for resellers to choose from (buyers wanted to check out a range of products);
tracking payments (accepting payments straight into bank accounts made it difficult for the resellers to assign which buyer had paid and for what).
Moreover, India’s fashion commerce consists of unbranded goods. And sellers of unbranded goods find it difficult to build that trust factor and loyalty on online platforms. Also, most of these small scale business people (like Maa) are not tech savvy.
To overcome these barriers, Meesho has built a platform with a suite of tools to help resellers market their products effectively. Meesho handles the major issues like customer management, inventory management, order tracking, registered sellers which resellers can rely on, and customer delivery.
No wonder it was declared the “No. 1 Personal Growth App of the Year” by Google Play Store in 2019.
Today, besides Hindi, the Meesho app is available in more than seven local languages. And about 40% of its daily usage comes from the non-English speaking audience. 90% of Meesho’s customer base is women.
Meesho is truly making the average Indian woman financially independent.
The Facebook Connect
Meesho is the first Indian start-up, ever, to receive investment from Facebook.
The synergy was obvious. Before Meesho came into the picture, resellers used to look for sellers on Facebook’s marketplace, share the products with their WhatsApp contacts and make sales. Meesho entered, and made the lives of resellers much easier. Tension-free - as my mom likes to call it.
If you want to know how Facebook is dominating this space, click here.
India’s social commerce market is expected to reach $100 billion by 2025 and the e-commerce market is expected to reach $220 billion. Makes sense why Meesho is one of the most well funded start-ups in the sector. Big names like Naspers (also invested in Swiggy), Sequoia Capital, Shunwei Capital, SAIF Partners and Y Combinator have also invested.
Our desi Meesho is the poster child for entrepreneurship with a social angle. As “vocal for local” gains momentum, and small and medium businesses take forefront in government policy decisions, Meesho is set to enter its next phase of growth.
With “growth” comes cash-burn. Meesho spent 91% of its revenue on delivery costs alone in 2018-19. Its revenue increased from Rs. 5 crores to Rs. 84 crores (~17 times) while its losses increased from Rs. 5 crores to Rs. 100 crores (~20 times). It has a long way to go on its path to profitability. To support this cash-burn, Meesho raised around ~$250Mn (~Rs. 1,700 crores) from investors.
As they say, nobody can create a market and enjoy sole dominance for a very long time.
Other social commerce companies are trying their luck at striking gold following the success of Chinese social commerce. Investors have also shown great intent and poured in lots of money in this sector. So much so, that social commerce emerged as the fastest-growing online retail segment in 2019.
Start-ups like DealShare, BulBul and Mall91 are also trying to make a mark in this space.
While the future looks bright for social commerce, there are larger questions that Meesho needs to answer.
Will consumers ever trust unorganised players when big names are spending millions of dollars to capture consumer’s mindshare?
Will Meesho be able to leverage its first mover’s advantage and emerge as a market leader?
Or would it be eaten up by a larger fish in the pond (any guesses)?
Food for thought.
Stay safe. Buy local.
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