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SoftBank-backed e-commerce major Meesho will intensify its focus on key growth drivers, particularly on acquiring new users and enhancing its value proposition in the non-apparel segment. According to a top company executive, these strategic measures aim to achieve an ambitious revenue target of over Rs. 10,000 crore by FY 2025.
With more than 35 million active transactions, the monthly orders have crossed over 100 million. The e-commerce company operates within the lower to middle-income household segment, with more women than men on its platform. It foresees significant growth coming from this target demographic going forward.
“We will continue to double down on some of these opportunities, such as new user acquisition; we see India is still far from where the number of e-commerce transactions itself should be on the platform,” a company spokesperson said.
At present, the company’s gross merchandise value (GMV) sales are evenly split, with 50 per cent coming from the apparel category and the remaining 50 per cent from non-apparel categories.
Furthermore, the company, which has 900 categories, is sharpening its value proposition in the non-apparel segment. “This involves increasing the number of suppliers to offer better price points. While we increase our user base, part of the growth will also come from the existing 140 million customers and those transacting more and more in categories,” the spokesperson added.
According to a Redseer research report, as of 2022, the country has 65–70 million households transacting on eCommerce platforms monthly, projected to reach 120–130 million by 2030.
Moreover, Redseer’s report also noted that 30–40 per cent of sales were led by players who specifically focused on solving for and expanding the mass consumer segment. This includes platforms such as Meesho (which grew by focusing on better regional and local selection and pricing), along with vertical platforms such as Purplle, and then the longer tail of smaller verticals and horizontals.
Financial performance
Although the company is yet to file its FY 2023 financials, it is confident it will hit profitability soon. In FY22, its revenue stood at Rs 3,232 crore, while it made losses of around Rs 3,251 crore. “Currently, the revenue growth is in excess of around 40 per cent YoY.”
Moreover, the startup believes in maintaining profitability across all categories. “So there is no one hero category, that produces all of the profits and one that is kind of bleeding cash, even the categories that we are investing in, we give a very tight profitability cartridge to them, similar to what the platform profitability is.
Additionally, it has also recently ventured into the branded space with Meesho Mall, offering products in categories such as electronics, beauty, and footwear. “We are investing in it as we see a trajectory of growth,” the spokesperson added. Ultimately, the company believes this strategic move will generate substantial value for its shareholders in the long run.
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