A Meta-Backed App Is Beating Amazon to Walmart

Meesho, the emerging e-commerce service, is gaining a lot of attention in India, more than Amazon, WMT or Walmart’s Flipkart. This invisibly poses a challenge to the US retail giants, which have already made billions of dollars tapping into the digital market.

Bengaluru-based Meesho, currently a leader in e-commerce, allows users to sell by sharing products with friends via messaging services WhatsApp, Facebook and Instagram. Meta is an investor in Meesho, but did not disclose shares, according to the WSJ.

It is known that Meesho was the most downloaded shopping app in the world in the first half of this year, according to app analytics company Apptopia, thanks to its convenience, richness and affordable price. About 127 million users have downloaded the app, compared to Amazon’s 81 million downloads and Flipkart’s 50 million during the same period. According to Dhiresh Bansal, chief financial officer of Meesho, Amazon and Flipkart mainly specialize in expensive items such as smartphones or televisions, unlike Meesho.

According to Bansal, Meesho’s goal is to become a leader in online commerce specializing in simple, low-cost items, such as clothing and home appliances. They are usually sold at unorganized retail establishments and account for 85% of the shopping market share in India. Therefore, the startup was born to serve a segment of consumers who are used to shopping at popular stores and are now switching to using the Internet.

Meesho was founded in 2015 and has raised $1.1 billion from investors, including Meta, SoftBank, Sequoia Capital India and Facebook co-founder Eduardo Saverin, venture capital fund B Capital Group. According to the WSJ, Meesho is currently unprofitable, but will at some point aim for a public listing. It is valued at about $5 billion.

However, in terms of revenue, Meesho is somewhat less competitive than Amazon and Walmart – two giants that have injected more than $ 22 billion into India since 2014. Each company has about $ 20 billion in sales. number of online sales per year.

The essence of American companies when entering the Indian market is to exploit the shopping potential of hundreds of millions of South Asian consumers, even if the growth rate of online shopping in India is somewhat slower. other markets. E-commerce currently accounts for only 5% of retail sales in India, well below the global average of 14%, according to AllianceBernstein.

However, the Indian e-commerce market is still forecast to nearly double to $133 billion by 2025 from $72 billion this year. The momentum is driven in part by consumers in small towns and villages.

Mansi Khajuria, a university student living in the northern Indian state of Uttar Pradesh, is a close customer of Meesho. Cheap shirt items of only 99 rupees convinced this girl.

“Meesho is like my Zara,” Khajuria said, referring to several Inditex-owned retailers she couldn’t afford.

According to the WSJ, Meesho users can order products and pay with cash upon arrival at the store. All shipping costs are free and there is no minimum order size.

Meesho generates most of its revenue through advertising, plus sellers pay extra to have their items prominently displayed on the app, similar to how China’s Alibaba does with the popular Taobao shopping service. variable.

Last month, Meesho’s app was opened more than 1.4 billion times by Indian users, compared with about 875 million for Flipkart and 570 million for Amazon, according to Apptopia.

Amazon previously invested $6.5 billion in the Indian market in 2013. The group entered the social commerce market in April and acquired a startup called GlowRoad. The specific amount has not been disclosed.

By: WSJ