How Meesho DISRUPTED India’s $83 Billion E-Commerce Industry | GrowthX Wireframe

Summary

Meesho, India's unique horizontal e-commerce platform, stands out as profitable amidst a $83 billion industry with 19,000 companies. Founded by Sanjeev Barnwal and Vidit Aatrey, it pivoted from a fashion delivery startup to a social commerce marketplace, empowering housewives and small businesses across tier 2 and 3 cities. Meesho's innovative B2B2C model, trust-building strategies, and logistics partnerships have led to over 3000 crores in revenue, making it a case study in e-commerce profitability and scaling for real GDP impact.

Takeaways

• 📈 India's e-commerce industry is a massive $83 billion market with over 19,000 companies, with Meesho standing out as a profitable horizontal e-commerce platform.
• 🌟 Meesho is the first horizontal e-commerce company in India to turn profitable, disrupting the industry with its unique business model.
• 🛍️ The founders of Meesho, Sanjeev Barnwal and Vidit Aatrey, started with a vision to bring fashion online but pivoted to a social commerce model after initial struggles.
• 🔄 Meesho's pivot involved creating a supply-side marketplace for resellers, leveraging the trust and influence of word-of-mouth in tier 2 and 3 cities.
• 📲 Meesho's platform enables homemakers and small businesses to sell products via WhatsApp statuses, handling delivery and payments, thus empowering a new wave of entrepreneurs.
• 📈 Meesho has grown to over 3000 crores in revenue, largely by targeting the Bharat demographic, which includes first-time internet users and those prioritizing value over speed.
• 📱 Meesho's success is attributed to its deep understanding of Bharat's shopping insights, focusing on trust, value, and word-of-mouth influence in tier 2 and 3 towns.
• 💡 Meesho's business model is unique in that it charges zero commission to sellers, instead making money from ads and logistics commissions, creating a win-win for both sellers and the platform.
• 🚀 Meesho's growth strategy includes increasing market size by attracting first-time internet users and enhancing retention through trust-building and a wide range of products catering to various purchase frequencies.
• 💰 The platform's financial success is also due to significant reduction in marketing costs, focusing on organic growth and leveraging the social circle influence for customer acquisition.
• 🌐 Meesho's story is an example of how Indian startups can scale towards real GDP impact, contributing to India's goal of becoming a 10 trillion dollar economy by 2030.

Q & A

What is the current value of India's e-commerce industry?

India's e-commerce industry is worth 83 billion dollars.

How many e-commerce companies are there in India, and what makes Mishu stand out among them?

There are more than 19,000 e-commerce companies in India, and Mishu stands out as the only horizontal e-commerce platform that is profitable.

What is the significance of Meesho's recent profitability in the e-commerce landscape of India?

Meesho's profitability is significant as it marks the first time a horizontal e-commerce company in India has turned profitable.

What was the initial business idea of Meesho's founders, and why did it fail?

The initial business idea was 'Fashion Near You', which allowed customers to pick clothes from a catalog of local shops for instant delivery. It failed because people preferred variety and a look at multiple options before buying clothes, rather than just fast delivery.

How did Meesho pivot from its initial idea to its current successful model?

Meesho pivoted by focusing on social commerce, empowering housewives and small businesses in tier 2 and 3 cities to sell items via their WhatsApp statuses, and bringing all of them onto one platform.

What is the core insight that Meesho's founders had about Bharat (rural India) shopping behavior?

The core insight was that Bharat users, being new to the internet, have a trust deficit and prefer word-of-mouth recommendations. They value the money they spend and are not as concerned with delivery speed as with the value they receive.

How did Meesho manage to convince Bharat users to pay and shop on their platform?

Meesho managed to convince Bharat users by building trust through a B2B2C model, where resellers they had already built relationships with introduced the platform to their customers, and by offering a wide range of products that catered to the value-conscious shopping behavior of Bharat users.

What is Meesho's revenue model, and how does it make money?

Meesho makes money primarily from logistics commissions and ads. They charge zero percent commission from sellers, but because of the large volume of orders, they have a monopoly over their third-party delivery partners, allowing them to dictate commissions.

How did Meesho increase its brand awareness from 24 to 94 within two years?

Meesho increased its brand awareness by leveraging its strong relationship with resellers, maintaining the reseller model as part of their order flow, and effectively marketing to their target audience.

What is the significance of Meesho's business model for the growth of India's economy?

Meesho's business model is significant because it scales towards real GDP impact, contributing to India's goal of becoming a 10 trillion dollar economy by 2030. It also serves as an example for other Indian startups on how to create large, sustainable businesses.

How does Meesho's approach to e-commerce differ from other major players like Flipkart and Amazon?

Meesho's approach differs in that it doesn't compete directly with Flipkart and Amazon. Instead, it focuses on increasing the size of the e-commerce market by targeting first-time internet users and Bharat users, who are new to online shopping.