Our performance in FY 2022-23, saw us achieve ambitious goals that we had set for ourselves. Revenue from operations for FY 2022-23 grew by an impressive 77% over the previous year to INR 5,735 Crs. This growth was achieved on the back of our continued leadership position as the most downloaded shopping app in India in 2022 and 2023, increased transaction frequency of our existing customers, widening category mix and redoubled focus on improving monetization through various value added seller services.
Our continued topline growth was further augmented by operating leverage and an increased focus on efficiencies across a number of cost items, be it customer acquisition cost, server and infrastructure cost and many others. As a result, our losses came down by 48% from (INR 3,248 Crs) in FY 2021-22 to (INR 1,675 Crs) in FY 2022-23.
The question we are often asked: can Meesho replicate and improve on that performance going forward? This H1FY 2023-24 company update is an attempt in that direction: it sheds light on our business performance, growth, expanding scale, and our democratized model. We aim to proactively share information on these metrics, such that anyone interested in Meesho’s journey, hears from us directly.
Key highlights from our audited H1FY 2023-24 performance:
- Consolidated revenue from operations were INR 3,521 Crs (up 37% YoY)
- Losses for the period were (INR 141 Crs) lower by 90% YoY, while turning profitable in Q2 FY24
- Cash flow positive for the entire period of H1FY 2023-24
The revenue from operations in just these six months exceeded the full year revenues of FY 2021-22. While the business continued to demonstrate sustainable growth, Meesho also became the first horizontal e-commerce company to turn profitable in India since July 2023 and has continued to remain so. The positive momentum in the business continued post this period’s end and spilling into the festive season as well where we witnessed continued growth across categories.
How did we get here?
Sustained growth momentum
According to data.ai, Meesho recorded an impressive 14.5 crore app downloads in 2023 in India. Meesho was the #1 Shopping app in India during this time period. We also crossed the momentous milestone of 500 million downloads in H1FY 2023-24. Our growth in downloads is now largely coming from organic word-of-mouth led momentum benefitting from the wide selection and low prices on the platform.
We were among the first movers to adopt a discovery-led product interface, keeping in mind the needs and preferences of our user base – Most of whom are new to online shopping. Our product teams have been relentless in their pursuit of simple UX designs, consistent and static UI, and an effective personalisation strategy. By leveraging AI, we assist users in finding tailored products, integrating advanced features like computer vision, virtual assistants, and improved search options to enhance their shopping experience.
Razor sharp focus on profitability
Over the past two years, our focus on profitable growth through cost optimization initiatives, combined with operating leverage, has significantly enhanced our profitability.
While maintaining the high growth witnessed in FY 2022-23 and H1FY 2023-24, Meesho has been able to optimize the Selling, General & Administrative expenses (SG&A) significantly on the back of its high mindshare with consumers resulting in organic traction as well due to the significant operating leverage inherent to a marketplace business. SG&A has improved from 53% of revenues in H1FY 2022-23 to 20% in H1FY 2023-24 while we continue to grow our user base and frequency.
Our asset light marketplace business model is now proven to operate at not just positive unit economics, but overall positive profitability while generating free cash flow.
Other key highlights from H1FY 2023-24
Launch of Meesho Mall
Through our extensive user research, we understood that our consumers are repeatedly searching for branded products across categories like Personal Care & Beauty, Footwear and Electronic Accessories. Our strategic expansion into this segment with Meesho Mall is a testament to the company’s ‘User First’ mindset, aligning with our goal to offer diverse and affordable selections to our consumers and enabling for several emerging and regional brands looking to tap a larger audience across the .
Currently, Meesho Mall has partnered with over 500 national and regional brands. In the last 6 months, Meesho Mall has processed ~2 crore orders, with more than 75% coming from tier 2+ cities.
Project Suraksha: Using AI to redefine safe e-commerce in India
Under 'Project Suraksha,' an umbrella initiative encompassing multiple strategies to combat counterfeit and restricted products, we implemented stringent verification processes, engaged in brand partnerships, and leveraged analytical models for fraud detection.
As a result, Meesho has created a ‘Suraksha List’ comprising ~1,800 brands identified as high-risk for infringement and counterfeiting. The project has yielded impressive results, deactivating nearly 42 lakh counterfeit and infringing product listings and 10 lakh restricted products in the past six months. Since February, there has been an 80% reduction in platform views for non-compliant listings, now representing less than 0.1% of platform views. The platform’s robust verification processes ensure only legitimate sellers sell on Meesho. In 2023, Meesho’s systems detected and blocked over 12,000 bad actor accounts from accessing the platform.
Welcoming more than 25,000 Non-GST Sellers in 2 Months, we’re expanding Opportunities for Millions of Small Businesses
Supporting the decision by the Government of India to relax the mandatory GST requirement for online sales for businesses with an annual turnover of less than 40 lakhs, Meesho implemented a first in the industry seller onboarding for non-GST sellers to begin selling on the platform from October 1, 2023. Within just 2 months, approximately 25,000 non-GST sellers from over 20 states such as Andhra Pradesh, Assam, Bihar, Punjab, Rajasthan, Sikkim, Uttar Pradesh, and West Bengal have registered on the platform. Together, they contribute to more than 1.3 lakh product listings. Notably, over 80% of these products are exclusive to Meesho, highlighting a diverse assortment that includes home decor, kitchen appliances and accessories, handmade jewelry, sarees, jute bags, fragrances, and more.
Where do we go from here?
A goal to digitize 10 million sellers by 2027
According to a recent RedSeer report, India houses an estimated 85 million MSMEs, with only around 1.5 million currently operating in the online realm. This notable discrepancy highlights the substantial untapped potential within this sector, presenting an opportunity to empower even the smallest sellers across the nation to embrace the e-commerce wave and elevate their businesses.
We have set forth a visionary objective to onboard 10 million small businesses by 2027, aiming to support their online success. Proudly leading the charge for SMB empowerment at the grassroots, this ambitious goal signifies a significant expansion from Meesho's current seller base of 1.5 million.
The landmark announcement was unveiled during an esteemed event in Delhi, uniting Meesho with industry stakeholders like ONDC and CAIT to honor and celebrate MSME sellers from diverse categories. The event served as a platform to commend the remarkable accomplishments of these enterprising individuals, pivotal to India's economic fabric. This collaborative initiative showcased a shared dedication to nurturing the growth and prosperity of India's small businesses, fostering an energetic ecosystem for entrepreneurial excellence. Shri Narayan Rane, Hon’ble MSME Minister, graced the event as the Chief Guest.
We've witnessed numerous victories and acquired valuable insights this year. One thing is evident: we've set ambitious goals and are determined to achieve them in the coming years. Our commitment remains steadfast in aiding the growth of our sellers, offering the most extensive range of products at the best prices for our consumers, supporting the government's digitization initiatives in India, and fostering our employees' development at Meesho. We see this as an ongoing journey, and our position is optimal to make e-commerce inclusive and accessible to billions of Indians.
