Meet India’s Real Gully Boy: Vidit Aatrey of Meesho is taking the entrepreneurial dream deep inside Bharat
Meeshois the new kid on the block that has emerged as a challenger to Amazonand Flipkartwith 120 mn users
- Aims to bring 100 mn small sellers across India online
- The newly minted unicorn is looking at going public in less than two years after it turns profitable.
AdvertisementShaan Ansari is a 19-year old entrepreneur who lives in the historic city of Panipat, 100 kms north of Delhi, and he may never qualify for any list celebrating under-20 entrepreneurs, but his story is no less inspiring than Ranveer Singh’s character in Gully Boy. The pandemic put his father out of work and Ansari out of school back in 2020.
When crisis struck, Ansari went scouting for opportunities online that would require zero investment and he found it in Meesho, a social commerce platform that is designed to help solo entrepreneurs and small businesses sell their wares to a wider audience.
Ansari sourced bath mats and door mats made locally and started selling them on Meesho. When his suppliers could not meet the demand, Ansari borrowed money to start his own factory. Today he manufactures these mats from a rented factory, employs 50 people and clocks revenues of ₹30 lakh a month.
It is transformational stories like Ansari’s that keep Meesho’’s co-founder and CEO Vidit Aatrey and his team going.
Recalling his trip to Panipat, Aatrey, says, “The neighbourhood that Ansari lives in is a really humble one and his home actually doubles up as a warehouse. When I visited him, his staff and family offered dry fruits with chai. Ansari kept telling us how his family’s fortunes have changed after he discovered Meesho. As a team we travel every quarter to listen to sellers like Ansari on our platform and are now attempting to solve some of their other financial needs so that they don’t have to go to money lenders for working capital needs.”
100 million sellers to reach a billion buyers
Aatrey’s dream is to get a million local businesses online so that they expand their markets by selling wares across India, irrespective of where they are located. In the last two years, this new kid on the block has emerged as a challenger to the Big Boys of e-commerce.
Meesho - which is a short code for ‘my shop’ - has gotten bigger after the pandemic with 120 million monthly active users (MAUs) in a short span of time. Flipkart and Amazon have 200 million registered users each. Meesho’s target is to have 100 million sellers on its platform and sell to a billion buyers.
Meesho was born on the premise that for online commerce to genuinely offer value, local retailers had to go online. Unorganized retail accounts for 90% of India’s spends. But when Aatrey and his co-founder Sanjeev Bamwal discovered that the sellers were not coming online because the buyers were not all shopping online. The pandemic has enabled Meesho to bring a lot more local businesses online as it was a matter of their survival.
Challenging Amazon and Flipkart
In the early days, Meesho’s sales were driven by 15 million women resellers, who bought products from the platform and sold it through WhatsApp and Facebook groups. From being a social commerce platform driven by re-sellers, it today has a share of nearly 30% in total daily online deliveries.
Of the 9 million e-commerce orders processed daily, Meesho accounts for 2.7 million, while the two biggies account for 5 million. Clearly, Meesho is the challenger that nobody expected would catch up with Amazon and Flipkart.
AdvertisementAnother interesting statistic says that of the 70 million shoppers online, only 10 million are digital natives. It is a no-brainer then that India’s small businesses can provide the network effect to any online commerce platform that chooses to target this segment.
Meesho waded into this space back in 2015, but found it tough to convince small entrepreneurs to come online because their customers were not online either. Language barriers and quality of internet speeds were only a few reasons why sellers were not online.
Even when they brought sellers online, their buyers were still not online nor was Meesho’s app on too many smartphones. This changed after the pandemic but before that it was Meesho’s army of 15 million women resellers that drove its gross merchandise value up until 2020.
Meesho is called a social commerce channel because it has been built by women resellers who found a vocation and economic independence by reselling goods purchased from the platform on WhatsApp and Facebook groups.
Between 2017 and 2020, 100% sales were happening through resellers. The share of these women resellers is now down to 20% as consumers have now started downloading the app. Meesho’s monthly average users stand at 120 million and 35 million users transact on the app every month. On an average, 110 million Indian shoppers bought on Meesho last year.
AdvertisementNot surprising that investors have also queued up to invest in the company. After raising seed capital of $300,000 from angel investors in March 2016, Meesho is valued at $4.9 bn after its latest round of capital raise of $570 mn in September 2021. Its list of marquee investors include Soft Bank Vision Fund 2, Prosus, Fidelity Management and Research, Yuri Milner’s DST Partners, Sequoia, SAIF Partners and Y Combinator among others.
Sellers turn brand ambassadors
Currently, there are six lakh sellers like Ansari on Meesho and the start-up wants to take this to one million. This goal may be work-in-progress, but every week employees join the Meesho Sabha, a meeting where examples like Ansari are discussed at length so that the team does not take its eyes off the goal post. Even though Meesho continues with its outreach programme to help sellers, existing sellers have now become brand ambassadors who are helping others get online. The platform offers peer-to-peer learning in several languages for those who want to get started.
Says Dhiresh Bansal, chief financial officer of Meesho, “We still do our outreach programmes but a lot of people are now coming to our platform, as they need to diversify by targeting newer markets. Also the younger generation is more progressive and are taking their family businesses online.”
After its success in the last two years, Meesho’s working hard to resolve several issues of sellers on its platform. Most of these sellers have seen a sharp rise in demand for their products after going online and the need for working capital requirement has gone up sharply.
Lucknow-based Suman Agrawal used to sell women’s fashion clothing at her boutique but has shut it down after her brand Rudraksh saw sales boom on Meesho. She currently manages 22,000 orders a month.
AdvertisementThere are several sellers in India who cannot go online because they don’t have the requisite GST number. Aatrey has been a votary of their cause for a while. In June this year, the GST Council cleared a proposal that will no longer require sellers on e-commerce platforms to have a GST registration, if their turnover is less than ₹40 lakh and ₹20 lakh for goods and services respectively. This rule will come into effect from January 2023. Aatrey believes that this will be a game changer for millions of small sellers across India.
While the company is not looking to raise capital immediately, it has plans to turn profitable and then hit the markets in a couple of years. The e-commerce player is looking at tightening its belt on costs now that it has attained scale. If it has to turn profitable in under 2 years then Meesho will have to cut back on cashburn and conserve capital.
Aatrey says, “This festive season will give us an indication if there is any slowdown. We have not seen that so far, so it will be something that we will learn from.”
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