FY 2023-24 was another remarkable year for Meesho, marked by significant achievements. We became the first horizontal Indian e-commerce company to achieve profitability during the year and the first to generate positive free cash flow and moreover operating cash flow of INR 232 crores for the full year. Our Revenue from Operations grew by 33% to INR 7,615 crores, fueled by 36% YoY growth in orders delivered. This was primarily driven by an increase in our annual transacting users as well as higher order frequency of our existing loyal customers.
This success stems from driving efficiencies across multiple areas like logistics, as well as leveraging Generative AI and Machine Learning for better discovery, improved in-app experience and round-the-clock customer support. Our Selling, General, and Administrative (SG&A) expenses as a percentage of Revenue from Operations declined sharply, driven by strong consumer awareness and organic traction, alongside the significant operating leverage that comes with a marketplace e-commerce model. Consequently, our adjusted losses have narrowed by 97% from INR 1,569 crores to just INR 53 crores, excluding Employee Share Based Compensation expense.
A summary of our key financial metrics for FY 2023-24 are as follows:
How Did We Get Here?
Unlocking E-Commerce for Indian Consumers
Meesho has made impressive strides, with 145 million unique Annual Transacting Users (ATUs) in FY 2023-24, implying approximately 10% of India has made a purchase through our platform. What’s particularly exciting is the shift in consumer behavior: consumers are not just buying multiple items within the same category, but are also turning to Meesho for a diverse range of their daily needs. As a result, Home & Kitchen, Beauty & Personal Care, and Baby Essentials emerged as the fastest-growing categories. We continued to be the most downloaded shopping app overall in India, and also crossed the overall 500 million install mark during the course of FY 2023-24.
Moreover, the order frequency per user continues to grow at a healthy pace, highlighting our consumers’ loyalty and their willingness to choose Meesho for all their shopping needs. We’re also seeing a substantial influx of new-to-e-commerce users, demonstrating our success in acquiring customers from India's underserved markets. This not only highlights the vast potential for e-commerce in India but also underscores our vital role in making e-commerce accessible to regions that have historically been overlooked.
Enhancing Product Discovery with AI-Powered Personalization Models
We have made significant strides to improve the overall user experience through advanced real-time personalization tools. By deploying sophisticated AI models to analyze factors such as category preferences, demographics, and time spent on our platform, we are able to deliver a highly personalized shopping experience, ensuring that each user has a unique homepage tailored just for them.
Unlike search, where users actively state their needs, the power of AI allows us to deliver highly relevant recommendations, enhancing the likelihood of a purchase. As a result, users can not only find the products they initially intended to buy but also uncover new products that meet their diverse shopping needs, leading to increased time spent on the platform. Consequently, Meesho continued to be the most engaged shopping application in India in terms of average time spent per day according to Sensor Tower.
Driving Operational Efficiencies
By optimizing our logistics processes, we have significantly reduced shipping expenses and improved delivery efficiency, allowing us to pass savings on to our users. The launch of Valmo has further expanded the logistics ecosystem by empowering small and regional logistics partners, which has helped optimize forward shipping costs significantly.
New initiatives like the ‘Scan and Pack’ program have enhanced fulfillment accuracy by requiring sellers to capture product images before dispatch. Our advanced AI model cross-verifies these images with product descriptions, and if there’s a mismatch, the system prevents the generation of a shipping label, leading to ~42% seller claim reduction.
We’ve also seen a remarkable increase in prepaid transactions compared to last year, contributing to lower return-to-origin (RTO) rates and decreased costs associated with cash-on-delivery (CoD) orders.
Enhancing Product Quality Through Customer Feedback
We have prioritized product quality by closely analyzing customer reviews, ratings, and feedback, while also monitoring any reported issues related to product quality and functionality. Over the past year, customer engagement has surged, with 75% of frequent shoppers now contributing ratings and nearly 80% leaving detailed reviews. This reflects the growing trust customers place in Meesho.
Our enhanced system provides a comprehensive overview of product quality, summarizing key feedback through specific keywords and metrics that highlight user satisfaction. Review summaries are updated in real-time, enabling a more informed and seamless shopping experience. Customers have contributed to an impressive 233 million ratings, 75 million reviews, and 13 million pieces of user-generated content such as images and videos, further enriching the decision-making process for others. This data feeds into our personalization engine, optimizing quality to meet user needs. This approach not only enhances the overall shopping experience for our customers but also encourages sellers to uphold exceptional quality standards.
The Future Lies in Building an Inclusive E-commerce Landscape
At Meesho, we are passionate about transforming the e-commerce landscape for everyone. Our commitment to making online shopping more accessible and affordable goes beyond business growth; it's about empowering millions of consumers, sellers and logistics partners to embrace the digital marketplace. As we continue to innovate and enhance our operations, we remain dedicated to providing exceptional value and a diverse selection of products that meet all our users’ needs.
We are excited about the journey ahead as we work to bridge the digital divide and unlock the full potential of e-commerce in India. By adopting lean cost structures and optimizing operational efficiencies, we will maintain our ability to offer the widest selection at everyday lowest prices.
Disclaimer: The financials mentioned in this document are based on the audited financials of Fashnear Technologies Private Limited (“FTPL”). Terms such as “We”, “Our Company”, “Meesho”, “Us” refer to FTPL and its financials.
