Meesho has emerged as India’s first horizontal e-commerce platform to achieve positive cash flow, a significant milestone in a highly competitive and historically challenging market. The SoftBank and Prosus-supported startup, which largely caters to consumers in smaller cities and towns, reported a positive operating cash flow of ₹232 crores ($27.6 million) for the fiscal year ending in March 2024. During this period, Meesho also grew its operating revenue by 33% to ₹7,615 crores ($905.6 million) while reducing its adjusted losses by 97%, from ₹1,569 crores to just ₹53 crores.
Meesho’s pace of growth is outstripping the overall e-commerce industry’s projected growth rate in India. Analysts at Bank of America anticipate that the country’s e-commerce market growth will slow to 17% in 2024 before rebounding to 20% in 2025, with the deceleration attributed to slower growth in consumer spending and the apparel sector.
Meanwhile, Flipkart’s marketplace division saw a 21% revenue increase to $2.12 billion for the year ending in March, while its losses reduced by 41% to $280.4 million. Amid these developments, India’s e-commerce landscape is undergoing transformations driven by quick-commerce platforms in urban centers. Zomato-owned Blinkit has expanded its network of dark stores, doubling its inventory items to over 10,000 and introducing features such as installment payments for purchases over ₹3,000 ($35.7), 10-minute returns for clothing and footwear, and split shipments to enhance delivery reach. Quick-commerce firms like Blinkit, Zepto, Swiggy’s Instamart, and BigBasket are forecasted to hit around $6 billion in annual sales this year, according to TechCrunch estimates.
Amid growing competition, top players are focusing on end-to-end control of logistics. Both Amazon and Flipkart now handle approximately 90% of their deliveries in-house, and Meesho has launched its own logistics arm, Valmo, to streamline shipping costs. Currently, Valmo manages around 35% of all Meesho orders, per Bank of America.
With the race to capture India’s next wave of internet shoppers intensifying, Meesho reports that 45% of its customers are from tier-4 cities or beyond, with a user base of 145 million unique annual transacting users, roughly 10% of India’s population. “We are witnessing an influx of new users unfamiliar with e-commerce, showing our success in tapping into India’s underserved markets,” Meesho stated, emphasizing the vast opportunity in expanding e-commerce to regions previously underserved.
Bank of America projects that an additional 120 million shoppers will enter India’s online shopping market by 2027, expanding the base to 380 million users. Notably, about 75% of these new users are anticipated to come from Tier-2 and Tier-3 cities, marking a wave of first-time online buyers in the country.
