Meesho IPO: Is Bharat’s Bazaar Beating the E-Commerce Giants?
- AltG Investment Research Lab
- Oct 24
- 6 min read
Updated: Nov 4
When news of the Meesho IPO broke, curiosity piqued. The app was downloaded, and within twenty minutes, ten items were ordered. Nail stickers, earrings, and a phone stand were among the impulsive purchases. The experience was addictive and oddly satisfying.
The app felt more like a game than a store. Its interface constantly presented new suggestions—colorful, low-priced, and diverse. Although the checkout indicated a 7–10 day delivery window, the first parcels arrived in just three days. They were neatly packed, cash-on-delivery, with no extra fees or hassles.
It is now clear why everyone from hair stylists to gym trainers shops on Meesho. The platform delivers affordability with surprising reliability. In India, that combination is invaluable.
What’s Going Right for Meesho?
Meesho’s evolution from a reselling tool to India’s largest user-based e-commerce platform reflects a significant shift in the country's consumption landscape. It capitalizes on the cultural and economic rise of Bharat—the expanding purchasing power and digital confidence of small-town India. While Amazon and Flipkart focused on urban consumers, Meesho built its foundation from the ground up, democratizing digital retail. Its value-first, discovery-led approach resonates deeply with India’s emerging middle class and younger demographic. This demographic is impulsive, price-sensitive, and motivated by social validation rather than brand loyalty.
As of December 2024, Meesho boasted 187 million unique annual transacting users (ATUs)—nearly 13% of India’s population. Between April and December 2024, the platform processed 1.3 billion orders, establishing itself as India’s largest e-commerce player by users and orders. Categories such as Home & Kitchen, Beauty & Personal Care, and Kids & Baby are experiencing the fastest growth. Notably, the app has been India’s most downloaded shopping app for four consecutive years—a feat neither Amazon nor Flipkart has achieved.
Execution and Scale: Meesho’s Hidden Strength
Meesho’s operational execution is often underestimated. Despite its focus on small towns, delivery speeds rival those of metro players, and the return experience is smoother than expected. In FY2025, Meesho reported 13.5 billion daily product views and a 9.5x average annual order frequency—clear indicators of user stickiness and habitual engagement.
India’s ₹18 Trillion E-Commerce Future
India’s e-commerce market, currently valued at ₹6 trillion in GMV, is projected to triple to ₹15–18 trillion by 2030. This growth will be driven by deeper internet penetration, more affordable smartphones, and logistics innovation. By then, Tier-2+ cities will account for over 50% of online sales, up from approximately 44% in FY2025—precisely where Meesho excels. The next 200 million consumers in India are not brand loyalists; they are deal seekers, experimenters, and digital natives. Meesho has already established the infrastructure to serve them effectively.
Value vs Convenience: The Two-Speed E-Commerce Model
India’s e-commerce evolution is now divided into two distinct lanes:
Value-focused platforms like Meesho aggregate unbranded and regional supply, winning on price and discovery.
Convenience-focused platforms like Amazon and Blinkit cater to time-poor, brand-aware consumers willing to pay for speed.
China’s Playbook: Why Value Commerce Wins
China provides a clear precedent for the success of value-focused e-commerce.
Value-focused e-commerce now commands over 60% of market share, led by Pinduoduo (PDD) and Douyin E-Commerce. Both platforms are built on gamified discovery and low prices. In 2024, Douyin’s GMV reached RMB 3.5 trillion (US $490 billion)—surpassing JD in order volume. The takeaway is that social + value + AI-driven discovery outperforms brand-led convenience.
India’s trajectory is likely to follow a similar path:
Apparel & fashion accessories – unbranded, fast-turnover; Meesho will continue to capture market share.
Home & kitchen – fragmented supply, visual appeal; ideal for discovery commerce.
Kids & baby care – low-ASP, high-frequency; perfect for Meesho’s engagement loop.
Beauty & personal care – remains more branded; Nykaa and Amazon retain the upper tier.
The demographic dividend—young, price-sensitive, socially influenced buyers—structurally favors Meesho’s model over Flipkart’s.
The Big Three: Amazon vs Flipkart vs Meesho
Amazon continues to dominate the premium segment, while Flipkart maintains its middle-market appeal. However, Meesho—despite being a decade younger—has now matched Flipkart in market share.
Flipkart vs Meesho: The Numbers Behind the Shift
Flipkart still leads in GMV with higher ticket sizes and more branded goods. However, Meesho excels in crucial areas for India’s next wave: users, orders, engagement, and momentum.
Amazon's response is telling; it quietly launched “Bazaar,” a Meesho clone within its app. Flipkart appears stuck in the middle—too premium for the mass market and too slow for the quick-commerce crowd.
Nykaa thrives where brands still matter—beauty. However, that remains a niche. India’s heartland seeks savings over luxury.
What Does the Future Hold for Meesho?
The AI Question: ₹480 Crore for Machine Learning — Overkill or Edge?
Meesho plans to allocate ₹480 crore from its IPO proceeds to AI and machine-learning teams. While the company deems this investment strategic, a more prudent approach may be restraint.
The proprietary “BharatML RankEngine” already drives product discovery, personalization, and routing. It determines what users see, optimizes delivery through Valmo, and translates across India’s diverse languages. This is impressive. However, the real challenge lies not in building new AI from scratch but in leveraging existing AI more effectively.
At this stage, Meesho does not need to engage in the AI vanity project arms race that companies like Meta are pursuing. Instead, it can license mature AI infrastructure from AWS, Azure, or Google Cloud and outsource advanced model training to India’s leading IT and analytics firms—TCS, Infosys, or Wipro—who already execute this efficiently at scale.
Meesho should focus on the application layer: the specific use cases where AI enhances the shopping experience—personalized feeds, smarter logistics, automated seller support, and improved fraud detection. The edge lies in execution and data, not in vanity AI R&D.
In summary, Meesho does not need to become an AI lab. It must strive to be the best user of AI in Indian retail—agile, outsourcing where beneficial, and relentlessly focused on results per rupee.
Can the Zero-Commission Model Last?
Meesho’s zero-commission model has attracted millions of small sellers, but the real test lies ahead. As logistics and return costs rise, it faces a crossroads similar to that of Zomato and Swiggy in food delivery—where hyper-growth collided with the need for cash flow.
Zomato and Swiggy began with zero or near-zero commissions to attract restaurants. Once they gained scale, they introduced “platform fees”—a nominal charge per order from consumers, later coupled with higher take-rates from merchants. Although this shift sparked backlash, it ultimately succeeded because users valued convenience and habit over the fee itself. The ₹3–₹5 charge now significantly boosts contribution margins across millions of orders.
Meesho is navigating a similar tightrope. Currently, it charges neither buyers nor sellers, absorbing logistics costs to maintain ultra-low prices. However, the pattern is predictable: once scale stabilizes, it can introduce small platform or service fees that most users will hardly notice—perhaps ₹2 per order—while leveraging its massive seller base and ad-tool ecosystem to generate higher-margin revenue in the background.
If Zomato and Swiggy demonstrated anything, it is that micro-fees compound quickly when frequency is controlled. Meesho’s frequency is already among the highest in Indian e-commerce, providing it with room to pivot without eroding trust.
In essence, Zomato monetized hunger; Meesho can monetize habit.
Future Monetization: Subscriptions and Credit
Two high-margin revenue streams stand out:
Loyalty Programs: A “Costco Card for Bharat” could revolutionize unit economics. Subscription bundles offering faster delivery, exclusive deals, or early access—similar to Amazon Prime—could yield steady, high-margin cash flows.
Financial Services: With transaction data from millions of small-town consumers and sellers, Meesho possesses a wealth of credit insights. A potential partnership with Bajaj Finance or other NBFCs could open a new lending frontier—offering a means to score and serve customers lacking formal credit histories. For financial institutions struggling to penetrate semi-urban markets, Meesho could emerge as the distribution platform of the decade.
Valuation: The $25 Billion Question
When Walmart acquired Flipkart in 2018, it valued the company at approximately $16 billion. Adjusting for inflation, growth, and Meesho’s broader reach, a $25 billion valuation for Meesho seems plausible.
However, its challenge mirrors that of every e-commerce player globally: free cash flow. Even Amazon would struggle without AWS. The difference is that Meesho is still in its early stages—and is structurally leaner.
Verdict
Meesho’s IPO represents more than just a listing; it is a referendum on India’s digital consumption story. It formalizes the mass-market economy built on affordability, trust, and discovery.
For investors, it is the clearest bet yet on India’s next 500 million shoppers—a segment Amazon and Flipkart misread. For Walmart, it serves as a wake-up call: Flipkart risks being left behind in the very market it helped create.
Meesho is not merely an e-commerce narrative; it is a cultural one. It has transformed shopping into social entertainment—and in doing so, it has discovered the formula to make Indian e-commerce truly mass-market.
However, the next chapter will test something deeper: Meesho already possesses the business model and the scale—what will define its future is capital allocation. It is a solid business today; how profitably it allocates capital will determine whether it evolves into a great one.
Reference: https://www.medianama.com/wp-content/uploads/2025/10/MeeshoLimited_UDRHP1_20251018222146.pdf
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