This Social Commerce App Is Eclipsing And Redefining E-commerce
Meesho operates an eponymous online marketplace that connects sellers with customers on social media platforms such as WhatsApp, Facebook, and Instagram
Social commerce has been the biggest revolution of the e-commerce and online shopping industry in recent years.
Customers are now looking for the easiest, engaging, and most meaningful shopping experiences that provide maximum value with minimum or no challenges.
And it is rightly said that “Customers are the king.” They define a brand’s success, growth, and market value.
The evolution of e-commerce to social commerce came into reality as brands discovered a solution that can drive brand sales, success, and growth and deliver valuable customer shopping experiences.
Since its inception, Social commerce has been trending among global brands selling products/services online. And now, marketers have predicted the global social commerce market to reach $604.5 billion by 2027.
Recently crowned unicorn and social commerce app Meesho plans to use funds from its latest $300 million fundraise to foray into the hotly contested online groceries business over the next 18 months.
The Bengaluru-headquartered startup will focus on bringing small-time grocers in tier-II and tier-III cities online, taking on deep-pocketed giants like Amazon, Reliance, Facebook, Walmart-backed Flipkart, and BigBasket for a piece of this large unorganized retail pie in India.
"Eventually, our goal is to enable all kinds of small businesses to come online. But, for the next 18 months, a high amount of focus will be only on groceries. There, our focus is to bring kiranas online," Meesho chief executive officer Vidit Aatrey told Entrepreneur India.
The startup Meesho operates an eponymous online marketplace that connects sellers with customers on social media platforms such as WhatsApp, Facebook, and Instagram. Its offerings include order management, taking care of logistics, online payments, real-time shop updates, and allowing businesses to get their customers to subscribe.
The startup further claims to have a network of more than 13 million entrepreneurs, a majority of whom are women, over 100,000 suppliers across nearly 5,000 Indian towns and cities that largely deal with grocery, apparel, home appliances, and electronics items.
Meesho said it will deploy the fresh capital to help 100 million individuals and small businesses in the country to sell online. “In the last one year, we have seen tremendous growth across small businesses and entrepreneurs seeking to move their businesses online,” remarked Aatrey, in a statement.
Amid COVID, which prompted New Delhi to issue a months-long lockdown, Meesho launched Farmiso, a product that allowed anyone to start an online grocery shop online without any investment. Aatrey commented that Farmiso has emerged as Meesho’s fastest-growing business. (Prior to the pandemic, Meesho had also started to expand in Southeast Asia, but has scaled down those efforts in recent months.)
In a recent report, UBS analysts identified social commerce and business-to-business marketplaces as potential sources of competition to e-commerce firms such as Amazon and Flipkart in India.
Social commerce is one prominent bet to take on modern e-commerce that has struggled to make inroads in India, despite billions of dollars plowed by Amazon and Flipkart. Another bet is digitizing neighborhood stores in the country — without so much of the social element — that dot tens of thousands of towns, cities, and villages in India. Global giants Facebook and Google are backing both the horses.
India's fast-growing e-commerce market is seen growing by 30 per cent a year to $200 billion by 2026. Further, the pandemic accelerated e-grocery sales in the country as Indians began buying essential items online in a bid to avoid catching the coronavirus.
Calling grocery one of the largest small business formats in the country, he said the team is trying to figure out how to bring kiranas online by offering services starting from sourcing, logistics, access to selection, affordability of products, digitizing their stores, and enabling easy buying experience for customers.
"We will invest a lot in technology to make that process easy. So far, online grocery has been a largely tier-I phenomenon. There are no large e-commerce grocery players in smaller cities. That's a large space we'll go after," he stated.
Aatrey said Meesho will also grow its team, especially the technology and products roles, over the next two years to meet the new goals. "We want to double our technology team over the next 18 months. These are big investment areas to use the new capital we've got."
He shared, Meesho will hire from engineering colleges across the country, including regional colleges. "We go everywhere where the right talent is."
The social commerce app, which connects 13 million small businesses to customers across the country through social media platforms like Facebook and Instagram, largely has women entrepreneurs selling fashion and apparel items. The app wants to reach 100 million individual businesses. It recently raised $300 million from SoftBank Vision Fund 2 at a valuation of $2.1 billion.
COVID-19 impacted the business initially but eventually led to the introduction of new and diverse categories. With the on-set of changing trends, they had to rewire the supply chain network to sell daily-use products in the homecare and sanitary product category. These categories were not usually sold on Meesho before the pandemic and had to be incorporated to tap the changing behavior of the users and entrepreneurs.
Additionally, they came up with a micro-credit strategy to ensure that our resellers had some minimal income. Under this plan, we provided small loans worth INR 5,000 to their resellers. The company was able to provide these loans without any formal underwriting or documentation process since they had all the bank account details and earning details of their resellers with them.
Meesho claimed that it was also one of the early adopters of the work from home policy and went into that mode even before the lockdown was announced in March 2020.
Aatrey noted, “In the era of hyper-competitiveness in the e-commerce space we at Meesho are trying to build trust in social commerce by ensuring that the relationships with resellers and suppliers are maintained. Our strategy has always been to empower more and more people to fulfill their dream of becoming an entrepreneur, especially women, who due to social obligations sacrifice their dreams and fall behind in terms of financial independence. We wish to give them all a sense of self and accomplishment through our platform. Social media is our backbone and these entrepreneurs, our pillars of strength.”
“Our vision is to enable 100 million small businesses in India to succeed online. We also aim to empower more and more entrepreneurs to succeed in their journey of running an online business with zero investment,” he further shared.