As per CEO Vidit Aatrey, the startup plans to use the funding to hire for its tech and business operation teams. It is also looking to scale up its platform by bringing in more resellers through community engagement and referrals.
The round brings the total funding raised by the startup to $3.7 Mn. Last August, it had raised an undisclosed amount of funding from VH Capital, Kashyap Deorah, Rajul Garg, Oyo Rooms’ Maninder Gulati, Abhishek Jain, Jaspreet Bindra among others. Prior to that, in July 2016, Meesho was selected by YCombinator for a three-month programme based out of its Mountain View headquarters. The accelerator invests $120K in startups for a 7% equity stake in the selected startups.
Meesho: Leveraging The Growing Social Ecommerce Market
Founded by IIT graduates Vidit Aatrey and Sanjeev Barnwal in 2015, Meesho is a mobile-first ecommerce platform that caters to the specific needs of small businesses in India. Businesses can create an online shop, share on WhatsApp and Facebook. They can keep customers updated with new products, get new customers leads in real-time and collect payments over chat.
Basically, Meesho connects suppliers to a network of resellers largely comprising housewives, who then use channels such as WhatsApp and social media platforms Facebook and Instagram to promote these products within their social circles. Currently, it has about 20,000 resellers and more than 1,000 suppliers on its marketplace, mainly in the categories of fashion, lifestyle and home, and kitchen.
Aatrey told ET, “We are building a new distribution channel for suppliers and helping housewives earn from within their social networks.”
A reseller earns 10%-20% commission on each transaction. Meesho has partnered with third-party logistics players to enable deliveries. About half of its orders are fulfilled through cash on delivery, around 25% through payment gateways, for which it has tied up with Razorpay, while the rest are done through mobile wallets.
This June, another ecommerce enabler Shopmatic which provides sellers with an entire ecosystem of selling online for their customers raised about $5.7 Mn in Series AA funding round led by tech focussed VC firm ACP Pte Ltd. Last month, GlowRoad, a women focussed customer-to-customer (C2C) reseller network, has raised $2 Mn in its Series A round of funding from Accel Partners.
As a per a recent report by Google and Boston Consulting Group, India has about 50 million registered small businesses and at present, about one million of them are online, mostly selling through Facebook and WhatsApp. It is expected that 10 million of these businesses will be online by 2020.
Similarly a latest Zinnov report states that with India’s ecommerce market aiming to touch $220 Bn by 2025, benefitting from this – the online housewive resellers are going to touch 21-23 Mn by 2022. The report also stated that online resellers space has been projected to grow to $48 Bn-$60 Bn by 2022. The number of online housewife resellers will increase from the current 2 Mn to 21-23 Mn by 2022. Also, the market share of online resellers is expected to rise from the current 1.2% of the Indian retail market to 5.4%.
The numbers clearly show the rise of social ecommerce with rising use of WhatsApp and Facebook among the Indian audience. As such, apps like Meesho, Zepo, and Shopmatic will continue to benefit from this surge. But with WhatsApp itself jumping in to leverage this market with WhatsApp for Business, social ecommerce apps like Meesho will face strong competition in the future.
(The development was reported by ET)