Meesho Business Model: How Does Meesho Make Money?
Introduction to Meesho and Its Unique Approach
The rise of online shopping has transformed the way people purchase products. eCommerce platforms like Meesho have not only made online purchasing convenient but also opened new income opportunities for resellers. Meesho, a prominent Indian social eCommerce platform, empowers individuals and small businesses to earn by selling products through social media platforms like WhatsApp, Facebook, and Instagram.
Founded in 2015 by IIT Delhi graduates Vidit Aatrey and Sanjeev Barnwal, Meesho is a mobile-first platform that allows housewives, students, and entrepreneurs to start their online businesses with zero investment. Derived from the phrase “Meri Shop,” Meesho has grown exponentially, becoming a game-changer in the world of social commerce.
The Business Model of Meesho
Meesho’s business model is based on social commerce, connecting suppliers, resellers, and customers seamlessly. Let’s break down how this innovative model works:
1. Reseller-Focused Ecosystem
Resellers choose products listed on Meesho and promote them within their social circles. They can set their profit margins above the supplier’s price. Once a customer confirms an order, the reseller places it through the Meesho app. Meesho takes care of the logistics and delivery.
2. Direct-to-Customer (D2C) and Business-to-Business (B2B)
Meesho operates as both a B2C and B2B platform. Suppliers list their products, and resellers promote these to customers. Meesho handles the supply chain, ensuring a smooth process for both parties.
3. Zero Investment Opportunity
Resellers don’t need to maintain inventory or invest upfront. They only need a smartphone and social media access to start earning. This makes Meesho a favorite for entrepreneurs in Tier 2, 3, and 4 cities.
Revenue Streams: How Meesho Makes Money
1. Commissions from Sellers
Meesho charges suppliers a commission fee, ranging from 10% to 25% of the product price. This revenue model is similar to other eCommerce platforms.
2. Reseller Commissions
Resellers also contribute to Meesho’s earnings. For every successful sale, Meesho takes a small commission from the reseller’s margin.
3. Logistics Charges
While Meesho provides free delivery services for resellers, customers pay shipping fees, contributing to the platform’s revenue.
4. Advertising Revenue
Suppliers and brands can pay for promotional opportunities on Meesho. Featured listings and sponsored products help businesses gain visibility, driving additional income for Meesho.
5. Data Monetization
Leveraging the vast amount of data collected, Meesho collaborates with partner companies to analyze consumer behavior. While ensuring data security, Meesho uses insights to enhance its offerings.
Key Achievements and Financial Growth
Revenue and Growth
- FY24: Operating revenue increased by 32.8% to INR 7,615 crore. Net losses reduced by 81.8% to INR 305 crore.
- FY23: Revenue stood at INR 5,735 crore, with losses narrowing by 48%.
Funding Milestones
Meesho has raised $1.36 billion across 13 funding rounds. Key investors include SoftBank Vision Fund, Naspers, Facebook, and Sequoia Capital. Its valuation soared to $4.9 billion in recent years.
How to Make Money with Meesho
Step 1: Choose Products
Browse through Meesho’s vast product catalog and select items to promote.
Step 2: Share on Social Media
Promote these products through platforms like WhatsApp, Facebook, and Instagram.
Step 3: Add Margins
Set a profit margin on top of the product price and disclose the final cost to your customer.
Step 4: Place Orders
Once the customer confirms, place the order via the app. Meesho handles delivery and payment collection.
Step 5: Earn Profits
For cash-on-delivery orders, Meesho transfers your margin to your account within 10 working days.
Challenges and Future Goals
Current Challenges
- Competition: Meesho faces stiff competition from platforms like Flipkart and Amazon.
- Fraud Prevention: Ensuring product authenticity remains a priority.
- Regulations: Compliance with evolving eCommerce regulations is critical.
Future Plans
Meesho aims to expand its presence in Southeast Asia and Latin America while preparing for an IPO. By focusing on reducing delivery expenses and enhancing user experience, Meesho is set to cement its position as a leader in social commerce.
FAQs About Meesho
1. What is Meesho?
Meesho is a social commerce platform that enables individuals to sell products online through social media.
2. Who are the founders?
Vidit Aatrey and Sanjeev Barnwal founded Meesho in 2015.
3. How does Meesho earn revenue?
Meesho earns through commissions, logistics charges, advertising, and data insights.
4. Can I make money with Meesho?
Yes, you can earn by promoting products, setting your profit margins, and leveraging Meesho’s logistics support.
5. Is Meesho safe for customers?
Yes, Meesho prioritizes secure transactions and ensures timely deliveries.
Meesho is redefining eCommerce with its innovative social commerce model, empowering millions to achieve financial independence. Whether you’re a reseller or a small business owner, Meesho provides an easy and profitable way to grow your online presence.