This Startup has Empowered MILLIONS to start their own Business
In this story of Let’s Discuss Business, we will discuss a startup that has empowered millions of people to make a fortune by becoming entrepreneurs and selling goods online. Even though this startup didn’t design its product specifically for women, it is the only company that comes to everybody’s minds when talking about companies ensuring women empowerment. Social Media is flooded with success stories of these women entrepreneurs, and this company takes pride in the value they are providing to them. No points for guessing, the startup we are going to discuss about is Meesho.
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Meesho founders Vidit Aatrey and Sanjeev Barnwal found an opportunity back in 2015 in the industry that was disorganized. Yet, it was the backbone of the Indian economy that contributed over 90% to the country’s GDP. Even though eCommerce had expanded its roots in the country, most sales were happening from mom-and-pop stores. Mom-and-pop stores refer to small businesses which can be either family-owned or an independent establishment. A local Kirana store in your vicinity is a perfect example of a mom-and-pop store. For over a year, Meesho targetted this audience, but its eureka moment came in 2016 when they stumbled on an unusual finding while examining their data. Meesho found that many sellers on their platform are women, running the business from home selling fashion and lifestyle products using their platform. A whole bunch of one-on-one discussions with these women, led Meesho to a micro-pivot to cater to the requirements of the people. By the second quarter of 2017, Meesho started providing the entrepreneurs with access to supply, logistics, payments, CRMs, and anything necessary to set up their stores.
Presently, Meesho acts as a platform that connects millions of resellers with manufacturers. Resellers, or entrepreneurs, make their catalogue of products from these manufacturers and sell through Facebook’s suite of applications. As Meesho handles the logistics, the resellers only need to find leads and turn those into clients and leave the rest to Meesho. This routine has aided the sellers to earn as much as twenty-five thousand a month.
To boost sales through the Meesho platform, it invested heavily in advertisements. Meesho kicked off Influencer Marketing Model in October 2019. However, it only picked pace from June to October 2020. Under this model, Meesho sponsored content creators on Youtube and partnered with AppsFlyer to monitor the campaigns. The content creators would make a full-length video for Meesho, and in return, Meesho would acquire new users through the referral links the Youtubers provide. Meesho saw a significant increase in their app downloads both by influencer scale-up and organic scale-up during their period of active campaign.
Meesho’s management proved their mantle during the Pandemic induced lockdowns during which their entire business operations stopped as none of their current services were deemed essential. Agreed that Meesho did a layoff of two hundred employees, they didn’t let the heat reach the resellers. They brought in various schemes for the benefit of the resellers, including micro-loans and a platform where the women entrepreneurs could make masks at home and sell it directly to Meesho. These small steps helped the people who make a living through Meesho. Meesho claimed that the people that had signed up for this program of making masks saw an increase in their earnings by 25–30% than pre-Covid.
Meesho is not just highly valuable for the resellers but also for the suppliers and manufacturers signed up on Meesho. Suppliers selling through Meesho pay substantially less commission to Meesho than the other eCommerce websites like Amazon and Flipkart. The low commission percentages ensure the product’s price is not significantly higher than the local stores, which is a thing with some product categories on Amazon, at least in India.
Meesho is a precious company for the suppliers and resellers, but it is yet to see the light of profitability. In the financial year 2020, Meesho was in the loss of 315 crore rupees which is almost three times the loss they made in 2019. The giant leap towards debt comes all the more surprising as in 2020, Meesho saw their revenue grow to over 306 crore rupees compared to 80 crores in 2019. The numbers suggest a staggering 255% increase in the expenses for the company during this period. In March 2021, Meesho shut down their business in Indonesia, where they only operated for a year. However, we cannot neglect that the only year they were active in Indonesia, the world was fighting a Pandemic, and it was a challenging year for businesses.
Meesho was valued at 2.1 Billion Dollars in April 2021, after they raised 300 Million Dollars in Series E led by SoftBank Investment Advisors. To date, Meesho has raised over 515 Million Dollars and has prominent investment companies on the board. Meesho, too, has invested in a startup in Latin America called Elenas, which, in brief, is Meesho for Latin America.
Vidit Aatrey has been vocal about the company’s plans for the upcoming years. Meesho currently has Fashion, Jewellery, home and kitchen product categories and is planning on bringing in Fast Moving Consumer Goods like packaged foods, over-the-counter drugs, beverages, and whatever you can find in a departmental store. Meesho has been trying out its hands at delivering groceries as well, which they started already during the lockdown.
Competition for Meesho is high and is only going to increase as Meesho tries to enter more markets. There is Amazon, Flipkart and Myntra for online shopping, while the entry of Meesho to grocery delivery means they are also competing with Grofers and BigBasket.
Selling Fast Moving Consumer Goods online would mean that Meesho would have to introduce a radical shift in their current system. Even if they sell it the dropshipping way, they would have to enforce a series of regulations on the resellers and make sure that they do not sell above the minimum retail price.
Meesho’s aims are pretty high at the moment, and so is the reward they are after. Meesho is targetting to bring all small businesses online, over one hundred million firms in the country. It will be interesting to see how Meesho achieves this goal and what changes they would bring to reach this objective.
I hope this story helped you get an insight into Meesho. Let’s Discuss Business is also available as Podcast on various Podcast Applications.
