Meesho Case Study and Success Story

Meesho Case Study and Success Story – Every startup has its fair share of success and shortcomings, but despite all the obstacles they come on top and set an example for future entrepreneurs and brands. One great example of such a startup is Meesho!

In this blog post, we will take a look at the success story of Meesho, through a case study that will take into account many factors such as the background of its founders, the revenue generated, marketing strategies, funding, business model and the scope of its growth in the future.

What exactly is Meesho?

Despite more than 6 years of its operation, not everybody is familiar with the name “Meesho”. For the unversed, Meesho is an Indian social e-commerce company that caters to small businesses and individuals. It allows you to start your own online store through social media platforms such as Facebook, Instagram and Whatsapp.

How does Meesho work?

Meesho is regarded as the #1 reselling app as it makes reselling products very easy.

You can earn through Meesho by selling fashion and lifestyle products on Whatsapp, Facebook and Instagram. Once you open the Meesho app, you will see a huge collection of quality products from top suppliers in business. Select a product that you think your network will like so much so that they will be willing to making a purchase. You can share these products with your Whatsapp contacts, groups, Facebook friends, Instagram followers, etc.

You can add your margin on top of the product + shipping charges, and share the final price with your customer. Once they confirm the order, you can place the same through the app. In case you place a COD order, the amount will be credited in your bank within 10 working days.

How was Meesho Started?

Meesho is the brainchild of two IIT graduates named Vidit Aatrey and Sanjeev Barnwal. The two were batchmates from 2008-2012. The idea of starting up a social commerce platform came to them when they were employed at InMobi. Soon, they began working on their idea with two things in mind- empowering the women and supporting Micro, Small and Medium Enterprises (MSMEs).

Before Meesho came up in 2015, the social commerce sector was really struggling.  

So, in a way, Meesho has revolutionized this particular industry and paved the way for many similar businesses. However, “Meesho” wasn’t the initial brand name that the founders came up with. They launched the startup with the name Fashnear. If it would have been in operation today, it would have been equivalent to what Zomato is for food; and what Grofers is for groceries.

The founders wanted to introduce a new choice-based method of shopping. For instance, a user could pick 3 items at once, which the delivery executive will take to their home. Upon delivery, they could choose one or more of the 3 products and pay only for those. The delivery executive would carry back the rest with him. As strange as this may sound, but it was the initial plan behind Fashnear. Thankfully enough it was not implemented.

The transition from Fashnear to Meesho

Considering more practical business models, they began working on a new strategy. According to the new idea, any shopkeeper could use their Facebook log-in to log into Meesho. Post this step, all their information was migrated and a page for their business was created with just a few steps. The platform helped with automatic stocking and inventory management, and perhaps because of these features they got 10,000+ shops on-board within 6 months.

The majority of the account holders were women who were reselling the products from top clothing suppliers and manufacturers. The founders soon realized that most of the women didn’t have their own inventory. This is where they realized the potential of Meesho to bridge the gap between suppliers and resellers.

Meesho Funding

• Meesho has raised money through multiple rounds of funding. Here is the complete timeline of the funds that the business has raised over the course of years:
• Meesho raised a sum of $120,000 at a 3-month summer program in July 2016. The program was headlined by renowned names like The Mountain View and Y Combinator
• Later that year, the startup raised an undisclosed sum of money from Indian angel investors VH Capital, Rajul Garg, Kashyap Deorah and Investopad founders Arjun and Rohan Malhotra
• The first major funding came in the month of October of 2017, when Meesho raised roughly $3.1 million in Series A funding from investors led by Indian capital firm SAIF Partners
• The company closed its series B funding round worth $11.5 million led by Sequoia India in 2018
• The same year Meesho closed its Series C raise worth $50 million
• By the end of 2019, Meesho had received Facebook’s maiden investment in an India-based startup.
• The startup raised $125 million in Series D round
• Meesho’s valuation rose to $2.1 billion. This happened when Meesho was successful at raising $300 million by SoftBank Vision Fund 2.
• Meesho’s valuation rose to $4.9 billion within 5 months, as it managed to raise $570 million in its Series F round led by Fidelity Management and B Capital.

Meesho’s Success Story

Meesho became a proud member of the Unicorn club (startups that have a valuation of $1 billion or more) in 2021. Meesho Co-Founder and CEO Vidit Aatrey believes that the social commerce market would be a $70 billion industry as there has been a consistent surge in the number of users in tier-2 cities.

You can get an idea about Meesho’s success through the following awards and recognition that it has gained over the years:

• Meesho claimed rank #8 among 25 fastest-growing YCombinator incubated startups in August 2016.
• The next year Deccan Chronicle, a leading daily newspaper, ranked Meesho among Top 5 apps for social commerce.
• February 2018 marked a great year for its founders Vidit Aatrey and Sanjeev Barnwal. The duo featured in Forbes list of 30 under 30 list of young achievers.
• Meesho was among a handful of businesses to be profiled by Forbes Asia in the same year.
• Meesho was chosen as part of the 1st batch of Google Launchpad’s ‘Solve for India’ program for startups in 2018.
• LinkedIN, too, honoured the company “as one of the Top 25 startups to work for based on a number of parameters including employee growth, talent pull, jobseeker interest, employee growth and level of professional engagement with its employees.

Meesho Revenue Model

Meesho earns revenue from a variety of methods as mentioned below:

1. Commissions

Meesho makes the majority of its revenue from commissions on each sale. They basically charge 10%-15% commission from sellers on every successful sale.

2. Advertisement

As a seller, you can buy ads on Meesho and rank above your competitors. Advertisement is a very reliable source of revenue for all startups today and Meesho is no exception.

3. Logistics

Meesho is well-known to provide an in-house logistics and delivery services to its sellers. By using this service, sellers save on a lot of hassle, while the startup makes some good revenue.

4. Penalties

Every time an order is shipped late or is returned because of poor quality, Meesho applies a fine on the seller. Although there isn’t an official figure as to the revenue the company has made through penalties, but the estimated amount accumulated through penalties stands at over 2 crores.

5. Float Money

Meesho holds the payment for 10 days before transferring it to the accounts of suppliers and resellers. They can certainly invest this sum in financial instruments/loan disbursal and make some decent revenue through returns/interest. 

Meesho Headquarters

Meesho has its headquarters at Bengaluru. The social commerce platform has sold over 90 lakh products in more than 3,000 cities across India. The social commerce startup has generated more than INR 5,000 crore in income for its suppliers and customers. If the official figure is to be believed, Meesho claims to have more than 13 million entrepreneurs on board. The most popular categories on Meesho are fashion, jewellery, home and kitchen.

Meesho’s Future

The primary reason behind the overwhelming success of Meesho is the fact that it allows their resellers to start their own online businesses with zero investment. Resellers do not need any inventory, equipment or resources to carry out their reselling business. All that is required is an internet connection and access to Whatsapp, Facebook and Instagram.

With each passing day, many micro, small and medium enterprises are joining the platform. Recent reports suggest that Meesho is looking to diversify its business model and target as many as 100 million small businesses and provide some decent competition to other giants.

The startup is now looking to include newer ones such as grocery, including staples and fast moving consumer goods (FMCG), as it goes head-to-head against the established online retailers. In the grocery segment, Meesho will provide direct competition to BigBasket, Grofers, and Reliance JioMart. Meanwhile, Meesho itself doesn’t face much competition for its core business; as a result, the road ahead looks highly promising.