Meesho, one of India’s fastest-growing social eCommerce platforms, had already declared that the enterprise aims to carry out major business expansions. The platform aims to target 100 million small businesses focusing on women-led resellers in the field of fashion and homeware. This strategy pits the platform against e-commerce giants like Amazon and Flipkart in India.
Resource: How to Register on Meesho as a Seller?
The Bengaluru-based company has already successfully conducted a $300 million fundraising last week from Japan’s SoftBank Vision Fund. Meesho is now valued at $2.1 billion. The platform now aims to take on Amazon and Flipkart by outlining a new business model and significant changes in their seller policy.
These changes are primarily aimed to lure more vendors to the platform.
The 7-Day Payments Feature Introduced by Meesho.
Amongst the fundamental changes in its business model, the most mentionable one is the change in its seller policy which introduces a 7-Day Payments Feature. Meesho has announced that the platform will reduce the payment cycle for sellers from 15 days to 7 days. The platform will also not charge sellers for order cancellations from here on, whether itself or automatic cancellations.
Resource: How To Register On Udaan as a Seller?
What does this mean?
Payout is the payment made by an eCommerce platform to the seller after a sale is completed on the platform. The industry standard for payout duration is set at 15 days, and most eCommerce platforms pay their sellers on 15-day cycles. Meesho makes an exception and stands out in the crowd with their new 7-day payout feature.
The “7-Day Payments Feature” will attract more vendors to the platform as the sellers will be paid faster than most other similar platforms in the Indian market. The company, in its statement, has said that its key focus is on “capital efficiency,” and this new payment schedule and structure will help vendors reinvest the money in their businesses, leading to consistent and continued growth and success.
Zero Penalty stands to be a key USP
Meesho has also said that it won’t charge sellers if an order is canceled, both for automatic and self-cancellations. Automated cancellation is when the seller runs out of stock, and self-cancellations are those made by the customer.
So far, sellers were charged 2.5% of the product’s price per day of delay till the order was canceled.
New Business Model Outlined by Meesho: A Step Into The Future Of Ecommerce
Meesho is one of the newly established unicorns in the country, established by Vidit Aatrey and Sanjeev Barnwal. The company is outlining a new business model after a new round of funding, and this is two years after Facebook-funded $25 million to the company.
Vidit Aatrey said, “India’s e-commerce is about 15 years old, but the number of small businesses that are selling their products online is less than 1 million. Most of the small businesses are still selling offline, which means there is structurally something wrong.”
The firm has gained considerable popularity as a reselling platform that aims to primarily empower women entrepreneurs and encourage them to start their businesses online through unbranded and longtail channels. Meesho focuses on products across a vast range of catering, including fashion, furnishing, and home appliances, and follows a parallel trade system through platforms like Facebook, Instagram, and WhatsApp. The platform aims at further expanding into other categories like grocery and fast-moving consumer goods (FMCG).
With these two highly seller-centric policies of 7-Days Payment and Zero Penalty on cancellations, Meesho aims to further climb the trajectory of seller acquisition and give tough competition to major players in the e-commerce field, including Amazon and Flipkart.