We live in a world where there are several chances for entrepreneurs. If you can’t locate enough materials, there’s always the wide world of the Internet and social media to assist you. Many people have started their companies by leveraging the power of social media platforms such as Facebook, Whatsapp, and others. It is the next generation sales market for businesses and individuals. The rising number of users on these platforms is a major motivator for social media marketing. It also allows businesses to save a significant amount of money on marketing. Many applications provide marketing tools and techniques that might assist you in expanding your business to social media and gaining more customers. Since 2015, Meesho has been supporting small merchants across India.
Vidit Aatrey and Sanjeev Barnwal, both IIT Delhi grads, created the Meesho app. Meesho is an abbreviation for ‘meri store‘ or ‘my shop.’ You will be able to establish your business on social media platforms such as Facebook, Whatsapp, Instagram, and others by using Meesho. With the tools offered by Meesho, you may build consumers, enhance transparency, develop a brand identity, and sell your items. It is India’s most popular online marketplace for resellers alone. Meesho online shopping has also become a well-known brand among leading suppliers.
Meesho is based in Bengaluru, India, and its services are offered throughout the country. They have sold over 90 lakh items in around 5000 cities throughout the country. They currently have a network of over 1 crore resellers and 7 crores clients. Because their commission is only removed once you have successfully completed a transaction, the app is truly trustworthy and dependable. Payments are also paid on time, so neither the Meesho provider nor the consumer has to worry about the transaction.
Funding and Investments
Facebook, SAIF Partners, Venture Highway, Sequoia Capital India, RPS Ventures, and others have made significant investments in Meesho. Meesho was financed in July 2016 by Y Combinator, a startup accelerator based in California, USA. Meesho was one of three Indian businesses chosen for the Y Combinator accelerator. Meesho raised $120,000 in financing throughout the course of a three-month summer program. Later that year, between March and August, an Angel round and a Seed round of fundraising were held. In October 2017, Meesho was able to secure 3.4 million dollars in a Series A round of financing sponsored by SAIF Partners.
On June 7, 2018, the Series B round concluded, raising $11.5 million. Sequoia Capital India, along with previous investors, led this round. DST Partners, RPS Ventures, Shunwei Capital, and others were among the main investors in the Series C round. This round, which took place in November 2018, was able to raise a total of $50 million. Meesho became the first Indian firm to win a Facebook investment in June 2019. Their most recent round of Series D investment, which totaled 125 million dollars, was completed in August 2019.
According to the most recent reports dated July 5, 2021, Meesho is hoping to raise more than $100 million in the newest round of funding, which will be led by two new and existing investors. Softbank and Prosus will be the major beneficiaries of this fresh round of funding. If this new round is successful, Meesho will hold its second fundraising round this year, with a valuation ranging from $3.5 to $4 billion. The most recent round, sponsored by Softbank, enabled the firm to raise around $300 million, allowing it to achieve unicorn status.
How Meesho makes money?
While Meesho business app invests much in providing last-mile transport for its social sellers, the organisation also profits from them. Meesho charges a normal shipping cost plus a 10 – 20% commission depending on the goods. Furthermore, it charges a high penalty for goods returns.
This is seen in the organization’s earnings for FY19. According to Meesho’s records, it earned INR 41.14 Crore in fees during the year, a 32x increase over FY18. Furthermore, the business earned INR 2.1 Crore in penalty profits in FY19. Meesho’s delivery expense earnings increased 19X from INR 1.804 Crore in FY18 to INR 36.78 Crore in FY19. As previously stated, its yearly revenue increased to INR 804.88 Crore in FY19, a 13X increase over INR 6 Crore in FY18.
Meesho now employs 750 people and plans to reach 20 million resellers by 2022. With half of Meesho’s target market coming from Tier 2, 3, and four cities, the company claims to have a presence in over a thousand cities, allowing resellers to begin selling with no capital and from anywhere in the world.
Also Read: Dunzo – Creating A New Market Through New-Age Experiential Marketing
Business Model
As a reseller, you want to share a product that is listed on the Meesho app with your community on social media platforms so that you may earn a commission on a regular basis. There are thousands of items to choose from, and as a reseller, you don’t have to worry about the logistics, payments, or delivery of a product you sold. Meesho operates on the industrial enterprise model, which is similar to that of other e-commerce businesses. Let’s go through their sales channels to have a better grasp of Meesho’s Business Model.
Commission
Meesho, like Amazon, generates money on a fee basis, which can vary between INR 10,000 and 20,000 depending on the category of the goods.
Logistics streams
Meesho’s shipping costs now look to be exorbitant, and they are attempting to reduce them, but doing so effectively through the use of logistics technology can save them thousands of dollars in sales.
Rank Push
As the number of dealers on the platform develops, they may be in a position to choose to push their goods to the pinnacle of searching, and as a result, Meesho may be in a position to upload each other circulation of sales.
Data
As we all know, in today’s world, data is as valuable as oil, and this will undoubtedly give a sales form for Meesho in the future.
Bogged Down by Delivery Expenses
Meesho’s online company claims to have over 15K suppliers and two million merchants across India. It has attracted $215 million through investors, with a focus on building social dealers. Employer evaluations for the fiscal year ending March 2019 may no longer be top evaluating for those investors. Meesho has declared a deficit of INR 100.24 Cr, a 19X increase over FY18. According to employer filings, Meesho online shopping app reported earnings of INR 84.88 Crore in FY19, a 13X increase from INR 6 Crore in FY18.
Meesho’s resellers select items from its inventory and share them with their network of customers, which might include family members, friends, or other acquaintances. Resellers are permitted to advertise items at prices they feel appropriate for their target clients, which is said to help promote in greater volume. Once the product has been shortlisted by the supply-up customer, the reseller places the order with Meesho and inputs the address information for the transport, which is handled by Meesho. On paper, the version looks adequate; unfortunately, logistics appear to be a killing rate for startups.
Employee benefits make up 33.5 percent of total fees or INR 21.1 Crore in FY19, which is a distinct prevalent rate for Meesho. That is less than what Meesho gives to resellers in terms of bonuses, incentives, and discounts. The INR 29.16 Crore spent in this line item in FY19 is a 42x year-on-year increase over the INR 68.17 Lakh spent in FY18.
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