Decoding the success of Meesho and its skyrocketing evaluation
2 Nov 2021
In its most recent funding round, Meesho raised $570 million from Fidelity and B Capital. This brings the company’s overall valuation to $4.9 billion – a more than doubling in just six months. The brainchild of two IIT grads, Meesho has been growing exponentially since its inception in late 2015 and is set to tackle marketplace behemoths like Flipkart and Amazon. But what precisely sets Meesho apart from other ecommerce hopefuls that have either faded out or continue to plod along?
Founded by Sanjeev Barnwal and Vidit Aatrey, Meesho started out as a reselling platform for women entrepreneurs. The name comes from ‘meri shop’ (my shop) – a nod to both the objective of setting up individuals as resellers and to the predominantly vernacular-speaking population of India. Anyone – from students, to housewives, to teachers, to office-goers –
could become a reseller by signing up on the Meesho app and resharing product links on their personal social media apps. Whenever someone places an order through those links, Meesho processes the sale and handles fulfilment while the reseller gets to keep the money from the sale – no commissions to be paid.
While the concept might seem simple, the implications for a market like India are immense. Given the high logistics costs associated with conventional selling models, most online selling platforms – including players in food and grocery delivery – see traction only in big cities even after several years in the market. There’s also the lack of familiarity with the interface of these platforms, which deters people new to the online world. With community-driven selling, by contrast, Meesho was able to penetrate even the farthest corners of the country with minimum effort. The chance to earn money from home without any entrepreneurial costs of their own was appealing to many – especially women in rural communities seeking financial independence – and the WhatsApp-like format of the app was a breeze to figure out. Once the pandemic hit, moreover, online purchases reached an all-time high, and those who had lost their jobs eagerly sought new ways to support themselves. The timing, in a way, couldn’t have been better.
Today, the numbers speak for themselves – over 17 million resellers (of whom 15 million are women), over 24000 pin codes serviced, and only five years to hit the much-coveted Unicorn Club. Their presence in Tier-II and Tier-III cities continues to grow, and Bain predicts that their net worth could jump to $70 billion by as soon as 2030. As home-based sellers enjoy
their newfound income and independence, Meesho runs in the background, quietly, as the fulfilment guarantee – orders delivered on time and at zero seller cost, and payments collected and credited promptly.
There’s a huge untapped market of potential online shoppers in India, and there’s never been a better time to gun for a piece of the pie. For new players, what matters even more than having a solid business plan is earning the trust of buyers quickly enough that they can outstay the competitors – and that’s where Star Squared’s stellar PR capabilities can help.