Meesho stands for “Meri eShop”, (my shop in English) established by IIT Delhi students Vidit Aatrey and Sanjeev Barnwal in late 2015. It’s India’s first social commerce platform where small businesses and any individual can do trade from home with zero expense. In 2016, Y Combinator selected three Indian companies and Meesho was one of them.
Meesho targets tier 2 and 3 towns, and claims of having more than 17 million resellers, 15 million of them are women (as per June 2021). They also have 60,000 suppliers.
“I come from a middle-class background and we’ve bought from small businesses all our lives. We wanted to bring them online,” tells Aatrey. “In India, there are about half a billion people who use WhatsApp regularly and the number of people who are buying from e-commerce platforms is still roughly about 100 million. This means that 80% of India’s population on smartphones is still not transacting online. The opportunity to bring the next e-commerce buyers online is very large,” he added.
Meesho’s reselling model is much like assisted purchasing; here the reseller may share any product in their network via Facebook, Instagram, and Whatsapp, etc. If anyone is willing to place an order for their customer they can simply add their margin to the product and promote it. Meesho will ship the product directly.
This profits all parties—the supplier saves on marketing and logistics, the reseller makes a profit through their markup on every product, and Meesho gets their commission from the supplier side.
How was Meesho Founded?
Vidit Aatrey (Founder & CEO) of Meesho chose to leave their Job at InMobi and begin with the startup journey. Then he founded Meesho with his Co-founder and CTO Sanjeev Barnwal who was working with Sony corporation back then. They both were batchmates (2008-12) and came up intending to build a platform to help the MSME sector (Micro. Small and Medium Enterprises). So, as social commerce was struggling to maintain the space in India, Meesho guided the way and revolutionized the Industry.
“Social commerce already got famous that time but there are lots of difficulties such as limited access to supply, absence of logistics/ payment choices, customer-friendly policies, etc,” told Vidit.
When this duo, founders of Meesho left their cushy jobs to start something by own. They originally started with the name FASHNEAR. They were seeming at creating a platform for fashion; a fashion comparable to what Zomato, Swiggy did with food, Grofers did with groceries. They planned to sign up for multiple stores from different localities on our app. Potential consumers could pick items from these shops and a delivery person would deliver them to their residence. They could pick the ones they want, pay for them, and return the rest if not needed.
How Fashnear Turned into Meesho
They recognized that the “Fashnear” marketing model was not working because people were less engaged with their products being local and more about sales. Where an online shop markets its products 24/7, 365 days, the offline stores they were tying up with could only allow end-of-the-season sales. However, the plus side to being knowing the market from the base and also learn the technique to communicate with shop owners.
When they went to the local market and shopkeeper in Koramangala, was especially informing the new idea because he told us that he was already selling his products online over the social media platforms Facebook and WhatsApp groups where he uploaded photos frequently. These shoppers would place an order and one of his workers would make the delivery and receive the cash. They were very motivated by this simple and yet strong idea, encouraged by his business model.
Then they went on a prototype and developing software that would take this business concept to the next level. This is how Meesho was founded.
Meesho’s Success Story
Meesho is the freshest Organization to join the Unicorn Club. In merely 5 years they reached the milestone of $1 Billion Valuation. They currently raised funds from Softbank Vision Fund 2 of $300 Million with a valuation of 2.1 Billion. Existing investors Facebook, Shunwei Capital, Venture Highway, and Knollwood Investment also engaged in this funding round.
Meesho has totally 9 funding rounds so far with a sum of $515.2 Million.
As the founder Vidit Aatrey, the social reselling business in India is expected to be $6-7 billion in size as of 2020. By 2025, social commerce is assumed to be ~$70B and entire eCommerce to be $200 Bn as the number of online purchasers, especially from tier II cities and ahead, continues to grow. Following the pandemic, Meesho has also seen an improved adoption rate in Bharat.
He also said “Overall, more than 70% of our orders come from tier II+ towns. We have seen very good adoption in tier II+ towns during the pandemic: we have served 2000+ new tier II+ towns since June and our order share from these towns has also increased from 67% earlier to 72% between July and December 2020,”
Now Meesho is at the next level but there is a lot of effort behind the success of MEESHO as we see in the segment “How Meesho Started”. They continued working on their idea, make changes in the business model wherever needed and take the opportunities they got.