Meesho Business Model & Revenue Model
🔍Insights
Online purchasing is ruling the market now. With a bundle of e-commerce websites coming into prominence with their wide range of products across niches along with affordable and convenient services for users that can be trusted, purchasing online has become very much a reality.
The fact that online shopping websites and e-commerce stores have been changing the lives of buyers and sellers ever since they emerged cannot be argued. However, it is also important to note here that these websites present enormous opportunities for people who want to be resellers and arrange a decent margin for themselves.
Meesho is one of the greatest examples of an Indian social eCommerce company, which also extends numerous opportunities for small businesses and individuals who want to start their own online businesses with the help of social media platforms like Facebook, Whatsapp, and Instagram.
Founded by batchmates and IIT Delhi graduates Vidit Aatrey and Sanjeev Barnwal in 2015, the Meesho app is a mobile-first eCommerce platform for resellers that includes housewives, domestic oldsters, and others who are fond of using social media channels like WhatsApp, Facebook, Instagram, and others to sell merchandise within their non-public community typically recognized as social circles.
Originally started as Meesho, the name of the company is inspired by “Meri Shop”, translated to "my shop" in English and the thought that it would serve as a shop for everyone in the country.
Today, Meesho's business model has more than a million dealers in over 700 cities in India on its platform. It additionally offers distribution to get admission to a few other 20,000 producers through its platform. Meesho has raised $1.1 billion. Meesho's reselling business works through a huge network of social media platforms. The company recorded revenue of INR 307 Cr in FY20, which is an increase of around 3.8x when compared to FY19, where it earned around INR 80 Cr.
Utilizing the networks created with the resource of using WhatsApp agencies and different social media systems, Meesho's business plan claims to usher in clients to serve as online dealers at decreased acquisition costs. Right at the onset, Meesho began to draw massive investment from the likes of Facebook, Naspers, DST Partners, RPS Ventures, and Shunwei Capital and currently claims to be a "one-stop destination for women's clothing and accessories," which also an exclusive range of men's fashion along with offering the unique opportunity to become resellers. Regarding reselling businesses, Meesho is often cited as "India's #1 Reselling app, trusted by 1 Crore+ Resellers".
Statista reported in 2020 that 3.6 billion+ people from all over the world were using social media then, and the numbers are estimated to be somewhere around 4.41 billion in 2025. With around 2.89 billion+ monthly active users, Facebook is hailed as the most popular social network worldwide as of November 2021, which is followed by Youtube (2.29 bn), WhatsApp (2 bn), and Instagram (1.39 bn), and the numbers are forever growing. This evolving social media landscape is making room for income for many, and Meesho is one of the companies that strongly believes in it and is profiting from it!
- Meesho - Latest News
- Meesho - Rise of A Social Commerce App
- Meesho - Bogged Down by Delivery Expenses
- Meesho - Revenue Model
- Meesho - Business Model
- Meesho - Funding and Valuation
- Meesho - How to make Money from it?
- Meesho - Future Goals and Hindarences
Meesho - Latest News
FY20 - Meesho recorded revenue of INR 341.6 Cr in FY20. The company's expenses touched INR 657 Cr. As a result, losses spiralled to INR 315.4 Cr in FY20.
November 19, 2021 - Meesho announces the MeeSOP program, which will allow all full-time employees to convert up to 25% of their CTC into ESOPs, which will be subjected to a minimum threshold of INR 50,000.
October 30, 2021 - Meesho is all set to launch a second employee stock ownership plan (ESOP) liquidity program worth $5.5 million sometime in November.
April 13, 2021 -Meesho plans to diversify its business model to target 100 million small businesses, a plan that pits the startup against online retail giants like Amazon and Flipkart in India.
April 5, 2021 - Meesho raised $300 million in a new round of funding from SoftBank Vision Fund 2, shooting the company's valuation to $2.1 billion, thereby joining the esteemed Unicorn Club.
FY23 - revenue grows 77% to Rs 5,735 crore, loss narrows 48% to Rs 1,675 crore.
Sarika Anand
Meesho - Rise of A Social Commerce App
Meesho - Bogged Down by Delivery Expenses
Meesho online business claims to have over 15K providers and a pair of Million retailers throughout India. It has raised over $215 Million from investors solely to establish social dealers and the surrounding market. Meesho announced revenues of around INR 341.6 Cr in FY20, ending March 31, 2020. This is a 4X spike from the INR 84.8 Cr revenue the company saw in 2019. However, the expenses of the shopping app continued to grow by 3.5X to INR 657 Cr, thereby signalling a loss of INR 315.4 Cr in the same year, around INR 100.42 Cr in the previous fiscal. The company, which had reportedly spent around INR 185.3 Cr in FY19, which increased by 15.8x from INR 10.97 Cr that it had spent in FY18, has a history of spending, contributing majorly to its losses.
Meesho’s resellers shortlist merchandise from the stock and try to share them with those who are within their community of consumers, including their own circle of relatives, members, pals, or other acquaintances. Resellers are allowed to promote the goods at fees that they deem healthy for their target consumers. Once the merchandise is shortlisted, the reseller locates the order with Meesho and enters the deal along with arranging for the transport. In most cases, Meesho helps with the deliveries with the help of its huge network of logistics service providers operating throughout the country. This service is free of cost!
Meesho also offers customers free cash-on-delivery services. Therefore, the only thing that's currently bothering Meesho and its services is the loss that the company is still seeing.
Baishali Das Adhikari
Meesho - Business Model
The company primarily operates as a social e-commerce platform, thereby following a D2C model. The business model of Meesho can also be explained as a B2B along with being a B2C if we highlight the reselling opportunities that Meesho brings in!
Earning Commissions from Suppliers
Suppliers who list their products on the Meesho platform are charged a commission, which may vary depending on the product category.
Earning Commissions from Resellers
Meesho charges resellers a commission ranging from 10-20% of the product price.
Advertising Opportunities
Meesho provides a platform for brands and businesses to advertise and generate revenue by offering advertising space.
Shipping Fees
The Meesho platform charges shipping fees to customers who make purchases.
Commission and Revenue Structure
The commission and revenue structure adopted by Meesho is as follows:
1. Suppliers: Suppliers are subject to pay a commission fee that varies between 10% and 25% of the price of the product.
2. Resellers: When resellers sell products, they are charged a commission that varies between 10% to 20% of the price of the product.
3. Customers: Customers are obligated to bear the shipping charges, which usually range from Rs. 100-200.
Meesho - Revenue Model
While the Meesho business app is spending closely on helping last-mile transport for its social sellers, the organization is also earning from the same. Meesho charges a standard delivery fee plus a 10 - 20% commission based on the product from all the sellers that the organization has listed thus far. Further, it additionally expenses a hefty penalty for product returns.
Meesho presently has an organization of 750+ employees and is focused on 20 Million+ resellers. Meesho's business model operates just like the business model of any other eCommerce service provider. With 50% of Meesho’s target market relying on Tier 2, 3, and 4 cities, the corporation claims to have a presence in 1000+ cities, which facilitates resellers to begin promoting with 0 funding.
As a reseller, you want to percentage a product that is indexed at the Meesho app around your community on social media systems and you may earn a fee regularly on a sale basis. There are lakhs of products to pick from, and as a reseller, you don’t have to fear the logistics, payments, and delivery of a product that you sell. Meesho works in the industrial enterprise version, which is comparable to different e-trade companies. Let's run down their sales streams for a better understanding of Meesho's Business Model and how it drives its revenues, thus the Revenue Model:
Commission
Just like Amazon, Meesho makes money with the help of commissions from the sellers. The company charges around 10-20% commissions from the sellers.
Logistics
Meesho's shipping expenses are a little high but the company is looking to push that down. However, with the help of cutting-edge logistics technology, Meesho adds some bucks to its overall revenue.
Advertisements
As the number of dealers is increasing each day, Meesho considerably adds to their income by featuring them on their app and website. Meesho charges sellers who want to showcase their products on the platform a significant amount.
Data
All of us are aware of the concept of big data, where data is almost as treasured as oil, if not more. Meesho takes hold of a huge amount of data, a part of which it sells to its partner companies so that they can use it for their own benefit and the benefit of the consumers. However, Meesho strives to keep the consumers' data and other sensitive data safe with them.
How does Meesho Reselling works
Meesho - Funding and Valuation
Meesho has raised $1.1 billion in total as of September 30, 2021. The fund it raised was led by some of the best Venture companies and angels, including YC, Facebook, Naspers, Sequoia Capital, Shunwei Capital, and SAIF Partners.
The reports dated July 5, 2021, mentioned that Meesho was aiming to raise over $100 million in the latest round of fundraising that will be led by two new and existing investors. Softbank and Prosus will be the primary faces of this new round of investment, said the reports, which, when successfully executed, will be the second fundraising round of the company and shoot its valuation to anything between $3.5 to 4 Billion.
The talks of the upcoming Meesho round took shape in the form of a gigantic $570 million round led by Fidelity Management and Eduardo Saverin's B Capital Group, which the company raised today, September 30, 2021. This helped the company more than double its valuation from what it recorded six months ago to attain a valuation of $4.9 bn. The previous round led by Softbank helped the company to mop up around $300 million to attain the unicorn status.
| Date | Stage | Amount | Investors/Shareholders |
|---|---|---|---|
| September 30, 2021 | Series F | $570 mn | B Capital and Fidelity Management |
| April 5, 2021 | Series E | $300 mn | Softbank Vision Fund |
| August 12, 2019 | Series D | $125 mn | Prosus and Naspers |
| June 14, 2019 | Corporate round | $25 mn | |
| November 5, 2018 | Series C | $50 mn | DST Partners, RPS Ventures, Shunwei Capital |
| June 7, 2018 | Series B | $11.5 mn | Sequoia Capital |
| October 12, 2017 | Series A | $3.4 mn | Elevation Capital |
| August 18, 2016 | Seed Round | $120K | Y Combinator |
| March 1, 2016 | Angel Round | $180K | Investopad, Venture Highway, Rajul Garg |
| Jan 15, 2016 | Seed Round | - | - |
Kinnary Nensee
Meesho - How to make Money from it?
Yes, you can definitely earn from Meesho. As Meesho proclaims itself as India's number 1 reselling app, it surely has its own perks. To make money on Meesho, You can simply choose from the products indexed on the Meesho app and share them around your community on WhatsApp, Facebook, and other social media platforms, different pages, and agencies. You may earn a fee that is in line with its policies.
As soon as you share the products, you will start to receive inquiries. You can then simply add your margin on top of the product charges and shipping charges and disclose the final price to the customer. Place the order on the app only after a customer confirms the order. The customer would get the order delivered within the next 2-3 business days, and all the while, you can conveniently track the order on the app.
Please note: In case you place a COD order, your customer would have to make the payment to our logistics partner. Once Meesho receives the payment, it will then transfer the margin that you are entitled to back to your bank account within ten working days or the digital payments provider that is aligned with your economic institution.
Alan Joseph
Meesho - Future Goals and Hindarences
As Meesho moves forward, it faces various challenges, including:
Competition
Meesho is facing competition from various social commerce platforms such as Flipkart, Shopsy, and Amazon's Seller Central.
Regulation
The Indian government is currently considering regulations that could potentially impact the social commerce industry.
Fraud
Some resellers have been caught selling fraudulent products, which Meesho is currently addressing.
Despite facing hurdles, Meesho has a strong team and user base, and a proven business model. The company is also expanding into markets in Southeast Asia and Latin America.
FAQs
How much is Meesho's Revenue?
In 2023, Meesho's revenue grew to Rs 5,735 crore, and losses narrowed down to Rs 1,675 crore.
How does Meesho make money?
Meesho charges a standard delivery fee plus a 10 to 20% commission based on the product.
What does Meesho do?
Meesho app is a mobile-first eCommerce platform for resellers consisting of housewives or at-domestic oldsters that then use channels consisting of WhatsApp, Facebook, Instagram, and others to sell merchandise inside their non-public community, typically recognized as social circles.
Who is the founder of Meesho?
Vidit Aatrey and Sanjeev Barnwal are the founders of Meesho.
When was Meesho founded?
Meesho was launched in December 2015.
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