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Meesho is built upon the bedrock of technology: Nilesh Gupta

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Mannu Mathew
Mannu Mathew
With over four years of experience, Mannu Mathew specializes in business journalism with a focus on technology, the retail sector, D2C, and E-commerce brands. He is working as the Assistant Editor for India Retailing and Images Retail Magazine.

Nilesh Gupta, General Manager, Growth at Meesho shares his insights on the growth factors, technology and relevance of the brand in tier 2 cities and beyond

New Delhi: Founded in 2015 by IIT Delhi graduates Vidit Aatrey and Sanjeev Bansal, Meesho is taking established e-commerce biggies Flipkart and Amazon head-on. A large part of its success comes from its popularity beyond metros. Today, nearly 80% of its customers come from tier 2 markets and beyond—many of whom have started their e-commerce journey with Meesho compared to around 60% that other e-commerce majors witnessed during a festive season in October 2022.

Meesho is driven by small businesses, which partner with Meesho owing to its industry-first initiatives such as zero commission, which helps sellers to pass on the savings to the customers. On average, sellers on Meesho have seen their business grow by 82% within two years as per details shared by the company.

The company recorded 140 million transacting users and aims to build a platform that promises ease of operations with visibility of all its products. Softbank-backed Meesho became the first e-commerce unicorn to post consolidated profit after tax (PAT) in the second quarter that ended September 2023, news agency PTI reported.

The financial year (FY) 2022-23 was a year of growth for Meesho. Its revenue from operations grew by an impressive 77% over the previous year to Rs 5,735 crore, the company told IndiaRetailing. Meesho substantially reduced spending on server and infrastructure components, along with a 50% reduction in cloud costs. As a result, the company’s losses came down by 48% from Rs 3,248 crore in FY 2021-22 to Rs 1,675 crore in FY 2022-23.

Meesho posts first-ever profitable quarter in FY24; loss dips to Rs 141 crore in first half
The financial year (FY) 2022-23 was a year of growth for Meesho. Its revenue from operations grew by an impressive 77% over the previous year to Rs 5,735 crore


The e-commerce platform also reported significant reductions in customer acquisition cost (CAC) and an 80% (YoY)  drop in marketing spending. Despite this, Meesho remains the most downloaded shopping app in India.

In an interaction with IndiaRetailing, Nilesh Gupta, General Manager, Growth at Meesho gives insight into the growth factors, technology and relevance of the company in tier 2 cities and beyond.

Edited Excerpts…

Was empowering small-town users a conscious decision for Meesho?

Yes. We have undertaken multiple initiatives to boost access and affordability for the country’s heterogeneous customer base. With over 15 lakh sellers and 12 crore active product listings across 30+ categories, Meesho aims to fuel the discoverability of a wide assortment of products at the lowest prices for Indian consumers.

From a uniqueness standpoint, it is all about the selection as the idea is to bring a wide assortment of products from every Indian local market at the lowest prices to create familiarity and regional relevance for every cohort of customers.

What percentage of Meesho’s sellers come from tier 2 & 3 cities?

Meesho has witnessed an 80% increase in seller registrations from tier 2 regions. Over 15 lakh sellers are registered on the platform with more than 40% from tier 2 cities such as Hisar, Panipat and Tiruppur and nearly 25% from tier 4 and the deepest corners like Pulwama in Kashmir, Una in Himachal Pradesh, Daman and Diu, and, Dindigul in Tamil Nadu. This includes the smallest towns like Bijaipur in the Chhatarpur district of Madhya Pradesh, Nagwain in the Mandi district of Himachal Pradesh, and Mohna in the Gwalior district of Madhya Pradesh.

In October 2023, Meesho implemented significant technological adaptations, paving the way for non-GST sellers to commence selling on the platform from 1 October 2023. This strategic move came in response to the announcement made by the GST Council that allowed e-commerce platforms to onboard non-GST sellers with a turnover of up to Rs 40 lakh.

What do you think makes Meesho popular in Bharat?

We have always believed in a ‘user first’ mindset and understand that the majority of our users belong to tier 2 cities with many of them using the internet for the first time. With a compressed size of 13.6 MB, Meesho is the lightest e-commerce app in India, on the Google Play Store, resulting in 80% of all Meesho transactions from tier 2 markets.

In 2022, Meesho strengthened its regional foothold by adding eight new vernacular languages including Bengali, Telugu, Marathi, Tamil, Gujarati, Kannada, Malayalam and Odia.

We also recognize the limited experiences these users have with typing in English or using keywords for doing a simple search on the net. Therefore, Meesho was among the first movers to adopt a discovery-led product interface, keeping in mind the needs and preferences of our user base. Our product teams have been relentless in their pursuit of implementing simple UX designs, consistent and static UI, and an effective personalisation strategy.

These efforts are paying off, with Meesho consistently clocking high user engagement in terms of frequency as well as duration. Furthermore, the annual purchase frequency of users has increased by 24% year-on-year basis translating into meaningful gains for the business.

You aim to democratise e-commerce. Can you tell us more about it?

Our vision is to enable the smallest of sellers in India to digitise their business and reap the benefits of online commerce: A much bigger market, higher incomes, and a digital footprint, among others. Meesho was built on the core principle of democratisation of internet commerce for the smallest of sellers across the country.

After successfully democratising e-commerce for millions of consumers and sellers in the country, Meesho is now leveraging this strength for a similar opportunity in the logistics sector. In India, logistics and supply chains remain largely unorganised, consisting of several regional players who serve limited geographies.

How do you make profits?

Since we are a zero-commission platform, sellers can use the money not spent on commission to promote their selection through seller ads. Meesho has several revenue streams like seller ads.

Furthermore, Meesho recently ventured into the branded space with its offering, ‘Meesho Mall’. Currently, Meesho Mall has partnered with over 400 brands which include renowned names such as Bajaj, Biotique, boAt, Gillette, Himalaya, Mamaearth, Milton, Paragon, Philips, Plum, Sirona, WOW Skin Science, among others.

Can you explain the concept?

Meesho Mall aims to transform the branded space with a key focus on categories such as personal care & beauty, footwear, electronic accessories, and more. There is a minimal platform fee to cover the costs of specialised services like a ‘Meesho Mall’ tag to help users identify branded products and provide additional support for account management.

Our rates are the most competitive in the market to ensure that the cost of conducting business for brands remains viable on Meesho. Our commission fees are designed in line with this framework, and brands are highly satisfied with our partnership.

How do you increase customer retention?

We are continuously working on improving delivery timelines and return processes to boost customer satisfaction. We have also expanded categories to be a one-stop shop for customers.

The operational foundation of Meesho is built upon the bedrock of technology, with a key focus on harnessing the potential of artificial intelligence (AI) to fuel innovation and creatively solve issues of both our buyers and sellers. Meesho has been investing in AI and ML over the last two years to ramp up personalisation and product discovery on the app. We have a monthly retention rate of close to 65%, which is expected to further fuel growth. Our team is continuously exploring new ways to leverage data science and other cutting-edge technologies to provide the best possible experience for our users.

How do you use AI?

At Meesho, AI plays a crucial role in enhancing user experiences and operational efficiency. We leverage it to personalize user experiences by analyzing shopping intent in real time. We also use AI to streamline cataloguing processes for sellers with taxonomy tagging, ensure accurate order fulfilment, provide tailored product and pricing recommendations, optimize search with vernacular language support, and offer 24/7 customer support through AI-powered chatbots. This comprehensive use of AI helps us improve customer satisfaction, drive sales, and empower sellers on our platform.

More insightful and stimulating conversations on technology trends in retail are expected at the Phygital Retail Convention (PRC) 2024.

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