Meesho takes plunge into branded business

NEW DELHI: In a move that will deepen competition in the e-commerce space, Meesho has forayed into the branded segment wherein it will allow its users the option to buy an array of products offered by national and regional brands including Decathlon, Philips and Bajaj. “A lot of our users searched for branded products on the platform. Since we didn’t offer the same, they looked at other online and offline alternatives. We spotted an opportunity and decided to launch our branded product offering Meesho Mall,” chief financial officer Dhiresh Bansal told TOI. The SoftBank-backed startup was so far operating only in the unbranded space, hosting low priced products on its platform largely offered by small and medium sellers.
The broader rollout of the offering which was initially piloted in certain pincodes comes amid the festive season, underlining Meesho’s strategy to cash in on the consumer demand which typically surges during the period. Bansal said that the move was also driven by demand from brands, many of which now want to expand their online footprint and reach consumers in the small towns. The price band of products under Meesho Mall, though, will remain in the range of Rs 100-2,000 keeping in line with Meesho’s USP of affordable pricing. “Brands are investing in new SKUs (stock keeping units) for the kind of customers that’s are on our platform to enable better pricing,” Bansal said. The bulk of the company’s 140 million customers come from the non-metros.
Meesho will garner a portion of its revenues by charging a 4%-5% commission from brands. “The combined (online plus offline) branded share in categories like BPC is about 20% and up to 15% for fashion, lifestyle, home, kitchen and electronic accessories is roughly about 20%. In the near to mid-term, we should be able to get a similar percentage of revenues from the branded product segment,” Bansal added.