Here’s how Meesho, Zepto, Pepperfry and Icertis cracked ‘hyperscaling’

Mar 23, 2023

By: BI India Bureau

Credit: Canva

What is hyperscaling?

A report by BCG, TiE Delhi-NCR and Times Bridge named ‘Road to Hyperscaling in India’, defines hyperscaling as a phase where startups grow fast to capture the market, beat competition and achieve critical mass organically.

Credit: Canva

Pitfalls of hyperscaling

Startups also face pitfalls like maintaining profitability and expansion with customer retention while maintaining governance and controls – as it goes through a phase of fast growth. The report also lists how some successful startups managed to hyperscale successfully.

Credit: Canva

Meesho: An expanding market

Meesho designed a unique reseller programme to target less tech-savvy consumers in tier 2 and tier 3 cities. It identified a rapidly expanding digital population and now over 70 percent of Meesho's business comes from tier 2 and tier 3 cities.

Credit: Meesho

OfBusiness: Credit plus commerce

OfBusiness saw that financing is a large missing piece of the puzzle in the B2B SME segment. They expanded into credit business to lock-in customers along with core offerings of commerce. Ever since, their repeat rates have become 90 percent.

Credit: OfBusiness

Naukri: First mover advantage

Since they identified this need early on, Naukri managed to grow with network effect, limited acquisition cost, retained strong brand recall with low marketing spends. It fended off international competitors like Monster, and clocked in 59 percent EBIDTA margins for recruitment solutions in FY22.

Credit: Naukri

Policybazaar: The investor mix

The secret sauce of this digital insurance marketplaces lies in locking in the best investors in the market. With 23 top investors behind it, few were left for competitors and now it has 90 percent market share in the digital insurance market.

Credit: Policybazaar

Zepto: The right ‘hands’

Zepto was a late entrant into quick commerce but it pocketed the best of the sliver of the talent with deep expertise in supply chain. Thanks to the accelerated career pathways that they created, it attracted plenty of senior executives from top companies within a year of its launch.

Credit: Zepto

Uber: Going local

Armed with its scalable tech, Uber also customized its products for the local market like low cost hatchback options, cash payments etc. In this market, they were also able to build full-tech solutions like Uber Bus, Uber Rentals and more.

Credit: Unsplash

Icertis: Powering partners

When Icertis started scaling up, partnerships became key to generate leads and sell better. Now its vendors integrate its CLM with their offerings bringing in ready customers with profit-sharing arrangements. Icertis has a CXO oversee its partnership programme and also builds platforms to work well with partner products.

Credit: Icertis

Pepperfry: Franchises to entrepreneurs

To grow offline via ‘Pepperfry Studios’, it created a model where franchisees are treated as entrepreneurs and empowered to control customer and post-sales interactions. It however retained control on upstream and downstream components of the value chain. Thanks to the model, it has added over 200 studios in a year.

Credit: Pepperfry

16 startups have laid off 100 percent employees in 2023 so far – 3 of them in India