Meesho Case Study

Introduction:

On April 5, 2021, Meesho, a Bengaluru-based social commerce platform, made headlines by joining the prestigious unicorn club. This achievement came following a successful funding round led by SoftBank Group Corp. of Japan, which raised a substantial US$300 million. Notably, Meesho’s existing investors, including Prosus Ventures, Shunwei Capital, Knollwood Investment, Facebook, and Venture Highway, also participated in this funding endeavour. With this infusion of capital, Meesho’s valuation soared to US$2.1 billion, marking it as the fifth Indian startup to attain unicorn status in 2021.

Munish Varma, Managing Partner at SoftBank Investment Advisors, expressed enthusiasm, stating, “SoftBank has always been keen on supporting founders who offer innovative solutions tailored to local markets.”

Meesho was founded in December 2015 in Bengaluru, India, by Sanjeev Barnwal and Vidit Aatrey. The name “Meesho” derived from “meri shop,” translating to “my shop” in Hindi. The startup’s primary aim was to assist small shop owners and individuals lacking physical stores in promoting their products online. Many small businesses faced challenges in accessing the capital required to establish their own shops. Aatrey explained, “For every visible small shop, there are 99 others who have always aspired to open one but lacked the capital. India is not a wealthy country, and most people lack access to capital. These individuals, who previously lacked the means to launch a store, joined our platform and became entrepreneurs for the first time. We eliminate the need for them to invest in working capital or set up physical shops.”

What exactly is Meesho?

Even after being in operation for over six years, the name “Meesho” remains unfamiliar to many. For those unaware, Meesho is an Indian-based social e-commerce enterprise designed to assist small businesses and individuals. It empowers users to establish their own online storefronts using popular social media platforms like Facebook, Instagram, and WhatsApp.

How does Meesho work?

Meesho stands out as the premier reselling platform, simplifying the process of selling products. You can generate income by marketing fashion and lifestyle items through Meesho on platforms like Whatsapp, Facebook, and Instagram. Upon logging into the Meesho app, you’ll discover a vast array of high-quality products sourced from reputable suppliers. Choose products you believe will resonate with your network, prompting them to make purchases. Share these products with your contacts on Whatsapp, Facebook, Instagram, and other platforms.

You have the flexibility to set your desired profit margin on top of the product price and shipping fees. Communicate the final price to your customers, and upon their confirmation, place the order through the app. If you opt for cash on delivery (COD), the payment will be deposited into your bank account within 10 working days.

WHAT MAKES MEESHO UNIQUE?

However, unlike traditional e-commerce platforms, Meesho operates as a social commerce business model. Rather than directly selling products to consumers, Meesho serves as a platform for resellers to connect with suppliers and manufacturers, enabling them to market products through their social media channels.

Meesho presents an innovative opportunity for individuals to earn money by initiating their own reselling venture. Additionally, Meesho offers a distinctive bonus program, granting resellers a weekly bonus based on their sales performance.

The “Refer and Earn” program by Meesho is particularly noteworthy, allowing resellers to earn commissions on sales generated by their referrals for up to two years. Furthermore, Meesho offers a VIP membership plan, providing members with discounts on all products without any associated fees or purchases required.

By simply completing purchases, individuals can access exclusive benefits within the Meesho ecosystem. These include free shipping, year-round discounts, Meesho credits, the Spin Wheel feature, and more. Explore the Meesho app to unlock its full potential and maximise your earnings.

The shift from Fashnear to Meesho

Exploring more practical business models, they embarked on a fresh strategy. Under this new approach, any shop owner could seamlessly transition to Meesho by logging in with their Facebook credentials. Subsequently, their data would be seamlessly transferred, and a dedicated business page would be established with minimal effort. The platform streamlined processes such as automatic stocking and inventory management, attracting over 10,000 shops within just six months.

Interestingly, the majority of account holders were women engaging in reselling products sourced from leading clothing suppliers and manufacturers. It became apparent to the founders that many of these women didn’t maintain their own inventory. This realisation highlighted Meesho’s potential to bridge the gap between suppliers and resellers.

Meesho’s Marketing budget

Meesho’s meteoric rise to becoming a million-dollar company has left many of us wondering about its secret recipe for success. While Meesho Projects shares similarities with high-end companies like Amazon and Flipkart in terms of their B2C structure, there are distinct differences in their brand images. One notable factor that sets Meesho apart is its emphasis on locally sourced products, which has significantly boosted small businesses and provided income-generating opportunities. However, this approach also presents challenges, such as the potential for fraudulent activities by unidentified buyers and sellers.

When the Covid-19 pandemic struck, Meesho faced a downturn, leading to the unfortunate necessity of laying off approximately 250 employees as the situation worsened compared to the previous five years. This downturn had a significant impact on entrepreneurs and resellers alike, with a notable decrease in product demand. Nevertheless, as lockdown restrictions eased, Meesho swiftly implemented initiatives to support its network, including providing small loans to resellers and entrepreneurs to help them revive their businesses.

These efforts proved fruitful, with businesses experiencing a remarkable improvement in performance, achieving growth rates ranging from 25% to 40% compared to previous statistics.

Meesho Funding

Meesho has secured funding through several rounds, marking significant milestones in its growth journey. Here’s a comprehensive timeline of the funds raised by the company:

– In July 2016, Meesho kicked off its funding journey by raising $120,000 during a three-month summer program, which featured prominent names such as The Mountain View and Y Combinator.

– Later in the same year, the startup received an undisclosed amount from Indian angel investors including VH Capital, Rajul Garg, Kashyap Deorah, and Investopad founders Arjun and Rohan Malhotra.

– October 2017 witnessed Meesho’s first major funding round, with the company securing approximately $3.1 million in Series A funding led by Indian venture capital firm SAIF Partners.

– In 2018, Meesho further solidified its financial standing by closing a Series B funding round worth $11.5 million, spearheaded by Sequoia India.

– The same year, Meesho successfully completed its Series C funding round, raising $50 million.

– By the end of 2019, Meesho received its maiden investment from Facebook, further bolstering its financial backing.

– The company’s Series D round saw it raise $125 million, contributing to its valuation reaching $2.1 billion.

– Meesho achieved remarkable growth in a short span, with its valuation soaring to $4.9 billion within five months. This milestone was reached through a Series F funding round, where the company secured $570 million led by Fidelity Management and B Capital.

Marketing Mix

Meesho’s marketing strategy revolves around the fundamental principles of the 4Ps of the marketing mix: Price, Product, Promotion, and Place. These elements form the cornerstone of Meesho’s approach to brand promotion and product positioning in the market.

Given that a significant portion of Meesho’s audience comprises women, the company’s messaging predominantly focuses on the theme of Women Empowerment. Meesho’s mission is to empower women financially and celebrate their resilience in overcoming economic and social barriers. This sentiment is encapsulated in the slogan “Not just a homemaker, a Meesho Entrepreneur,” which effectively conveys the company’s ethos.

Notably, over 70% of Meesho’s orders originate from tier 2+ towns, showcasing the platform’s strong adoption in these regions. Even during the pandemic, Meesho expanded its services to over 2000 new tier 2+ towns, with a noticeable increase in order share from these areas from June to December 2020.

In terms of advertising and promotions, Meesho employs a combination of television commercials (TVC) and social media campaigns. In this blog, we’ll explore some of the TVC advertisements that have garnered popularity for Meesho, examining the messages they convey and their effectiveness in the company’s overall marketing strategy.

Meesho’s Competitor Analysis

Meesho finds itself in fierce competition with eCommerce giants such as Amazon and Flipkart, both of which boast significant media presence and have roped in Bollywood celebrities for endorsements.

In the face of such formidable competition, Meesho differentiates itself by focusing on social commerce to build trust among its users. The core of Meesho’s marketing strategy revolves around empowering individuals to achieve their dreams, particularly by enabling entrepreneurship with minimal capital investment. Meesho’s unique selling proposition (USP) lies in its ability to cultivate entrepreneurs from diverse backgrounds and to explore new avenues to expand its value proposition.

In addition to competing with Amazon and Flipkart, Meesho also faces competition from other players in the market such as Deal Share, Glow Road, Shop 101, City Mall, Bulbul, Simsim, and Volusion.

Marketing Strategy of Meesho

Meesho boasts an extensive range of products catering to a diverse array of needs, particularly focusing on ethnic wear for women. From sarees, Kurtis, Lehengas, kurtas, blouses, to western dresses, the selection is vast. Additionally, Meesho offers accessories, footwear, bags, jewellery, lifestyle collections, and much more to complete one’s ensemble.

Men are not left behind in Meesho’s offerings, with a variety of latest accessories and outfits available. This includes kurtas, kurta sets, suits, sherwanis, and more, catering to traditional tastes. For those inclined towards Western wear, Meesho provides options like jeans, trousers, shirts, T-shirts, and seasonal attire, ensuring a comprehensive wardrobe selection.

But Meesho’s offerings go beyond apparel. The platform extends to include basic kitchen accessories, home decor items, daily use products, and even electronic items. With such a diverse range, Meesho endeavours to be a one-stop destination for all consumer needs. Here are some additional points Meesho has considered:

Quality Products that too at the Lowest Prices

You can now conveniently order from Meesho, a nationwide network of wholesalers offering a wide range of fashion and lifestyle products at prices that cater to your preferences. Since all items on the Meesho app are sourced directly from suppliers, wholesalers, and manufacturers, you can enjoy them at competitive wholesale rates.

Discounts and First Orders Offer

New users of the Meesho app have the exciting chance to receive a 30% discount, up to Rs. 100 in INR, on their first order. This offer is applicable regardless of the order value or product category, making it an irresistible opportunity for first-time purchasers.

Delivery and Shipping to be Free

One standout feature of Meesho is its complimentary delivery service on all orders, without any requirement for a minimum order value. This distinguishes Meesho from other platforms, offering added convenience and savings to its customers.

Availability of Cash On Delivery (COD)

Contrary to some apps, Meesho prioritises accessibility by offering Cash On Delivery (COD) as a payment option. This ensures that individuals without online payment methods can still make purchases by paying upon product delivery, providing a convenient and inclusive shopping experience. In essence, with COD, you can pay for your products after receiving them.

Returns/Refunds are made free

In contrast to some apps, Meesho values customer feedback and offers a 7-day Free Return & Refund policy. This means if you’re dissatisfied with your purchase, you can return it within seven days and receive a refund without any hassle or questions asked. With these customer-centric policies, Meesho ensures that online shopping and earning through reselling are secure and risk-free experiences.

Meesho’s Marketing Campaign

Meesho opted to garner attention and promote their brand through captivating phrases and taglines. Two examples that resonated well and left a significant impact were:

“Humara Mission Sabse Kum Commision”

Meesho charges a minimal commission of just 1%. Suppliers simply need to register on Meesho and list their products. Once listed, orders begin to come in, especially when entrepreneurs share the products on social media. The standout feature of their campaign was the commitment to all suppliers, regardless of size, ensuring visibility of their products on the Meesho platform.

This opportunity offers suppliers greater exposure to a vast audience, reaching potentially up to 10 million people, across a diverse array of over 600 categories. Meesho also ensures competitive shipping rates, providing wholesalers and suppliers an excellent platform to expand and thrive their businesses.

#MystoreMystory

Another notable campaign was #MyStoryMyStory, which highlighted the diverse roles women play in our lives. It emphasised the journey of establishing one’s identity, with Meesho playing a pivotal role in this realisation. This campaign served as an impactful marketing strategy for Meesho, conveying a beautiful message about empowering women. It showcased how women can embark on their entrepreneurial journey as resellers, not only achieving financial independence but also gaining social recognition along the way.

Social media and influencer marketing

Social media serves as the most effective and direct means of reaching a broad audience. Recognizing this trend, Meesho actively engages with its followers through various social media platforms. Leveraging influencer marketing, Meesho collaborates with influencers who promote its products through posts and videos, earning a commission in return. Additionally, Meesho capitalises on the popularity of memes, utilising them as a fun and engaging way to promote its brand amidst the ‘meme wave’.

YouTube and Facebook ads

Advertisements are a tried-and-tested method for boosting any business, and Meesho is no exception. Clicking on these ads directs users to Meesho’s website, effectively increasing traffic and visibility for the company.

Meesho’s business model & distribution strategy

Once Meesho found its product-market fit and established its mission of empowering housewives to forge their own identities and earn income, it began to expand its business. Here’s how Meesho’s business model and distribution strategy operate!

Given its focus on the fashion industry and its target demographic of women, Meesho collaborated with various influencers and YouTubers. While providing them with minimal collaboration costs, these influencers shared Meesho’s products spanning over 200 different categories and its user-friendly app with their respective communities through videos and posts, propelling Meesho to prominence in the social commerce sector.

Even its initial television commercial (TVC) centered on women challenging housewife stereotypes and crafting their own identities. The ad empowered women to recognize their potential and become entrepreneurs in a straightforward yet impactful manner.

Meesho’s revenue model

Meesho generates revenue through various avenues:

Commissions: Meesho earns a commission of 10-20% on each sale facilitated through its app or website.
Penalties: In cases of product returns due to poor quality or damage, Meesho imposes a penalty fee on the seller.
Advertisements: Meesho offers paid advertising opportunities on its platform, enabling sellers to enhance the visibility of their products compared to competitors.
Logistics: Meesho provides comprehensive support for packaging and delivering products to customers’ doorsteps. This logistical assistance not only saves sellers time and effort but also generates revenue for Meesho.
Float Money: Meesho holds payments for 7-10 days post-delivery. This capital can be utilised for investments and loans, generating returns and interest for Meesho.

Meesho’s in-house cost structure

Operating a marketplace entails significant expenses. Here’s a brief overview of Meesho’s cost structure:

Technology Costs:

Meesho maintains an in-house technical team dedicated to enhancing the platform’s functionality and user experience. Technology expenses encompass server costs, Content Delivery Network (CDN) costs, and other infrastructure-related expenses.

Marketing Costs:

Meesho invests heavily in marketing initiatives, spanning various channels such as television commercials, affiliate marketing, online advertising, and promotional campaigns.

Payment Processing Fees:

Meesho incurs processing fees from payment gateway providers like Paytm, Google Pay, PhonePe, etc., for each transaction processed through their platforms.

General Expenses:

This category includes costs associated with salaried employees, legal counsel, and overhead expenses necessary for the day-to-day operations of the business.

How can anyone start earning with Meesho?

Earning through Meesho is accessible to everyone. With a vast array of products spanning over 200 categories, you can curate a personalised selection tailored to your community’s preferences and easily share it via social media platforms such as Facebook, WhatsApp, and Instagram.

For each sale made through your efforts, you’ll earn a commission based on Meesho’s guidelines. Additionally, you have the flexibility to set your profit margin on each product individually. When a customer is ready to place an order, you simply add your profit margin to the product’s cost listed on the Meesho app, including shipping, and inform the customer of the final price to the customer.

Upon delivery of the order, you can expect to receive your payment within 7-10 working days, as per Meesho’s guidelines. In the case of Cash On Delivery (COD) orders, the customer pays the delivery executive directly. Once Meesho receives the payment through their agents, your payment will be credited after 10 working days.

Key activities of the Meesho model

It creates a space where buyers and sellers interact and conduct business together. Meesho employs an internal team to ensure the quality of all products sold on the platform. Through its integrated catalog, Meesho enables resellers to select products and share them with their networks via platforms like WhatsApp and Facebook. Additionally, Meesho runs advertising campaigns to increase awareness of its reselling platform, attracting more sellers over time. Meesho manages payments between sellers and customers, with customer payments initially going to Meesho, which then disburses payments to sellers within 7-10 business days according to their policies. Furthermore, Meesho provides in-house customer support to address issues such as damaged products, returns, refunds, and exchanges.

Meesho’s Future

Meesho’s remarkable success stems from its unique proposition: empowering resellers to launch online businesses without any upfront investment. Resellers can kickstart their ventures without the need for inventory, equipment, or resources, only requiring internet access and platforms like Whatsapp, Facebook, and Instagram.

The platform sees a steady influx of micro, small, and medium enterprises, with recent reports indicating Meesho’s ambition to reach 100 million small businesses, posing formidable competition to industry giants.

Expanding its scope, Meesho plans to venture into new territories such as grocery, including staples and fast-moving consumer goods (FMCG), challenging established players like BigBasket, Grofers, and Reliance JioMart. While facing minimal competition in its core business, Meesho’s trajectory appears promising as it diversifies and expands its reach.

Conclusion

Meesho’s ascent as a flourishing company demonstrates its innovative approach to development. With over 13 million entrepreneurs leveraging Meesho to establish online ventures without any initial investment, their business model, structure, and advocacy challenge traditional norms. Reselling offers a pathway to wealth accumulation through flexible, low-capital endeavours, relying solely on communication channels. These intermediary roles provide avenues for income generation, with resellers determining their profit margins.

Amid global challenges, Meesho has facilitated the empowerment of small businesses, alleviating barriers and fostering independence. Evolving from a mere marketplace to a robust social-commerce platform, Meesho empowers and supports aspiring entrepreneurs.