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In 2015, Meesho was born out of an interesting brainstorming process: they made a spreadsheet with every popular business model (Airbnb/Uber/hyperlocal for…) in each row and every sector (groceries, travel, e-commerce) across each column. While they found a lot of players in the row for hyperlocal models and in the column for the fashion sector, they found very few meaningful approaches that addressed the intersection of the two.
And so was born FashNear (“fashion, nearby”), a hyperlocal fashion platform. In Vidit’s words:
Once it was understood that the majority of commerce activity came from small, unbranded businesses, the question became: How do you bring India’s small businesses online?
That question would lead them through multiple reinventions and eventually to building what is now India’s largest e-commerce platform by volume. Today, Meesho processes over 4.5mn orders daily, serves 213mn annual transacting users, and filed for an IPO at near-breakeven, a rare feat in Indian e-commerce.
Insight 1: The majority of Indian retail is unbranded, and it lacks an online presence
~75% of India’s retail is unbranded.
When you walk through a typical Indian bazaar where most Indians shop, you see thousands of products with no brand recognition.
These are products from small manufacturers, often family-run businesses that have been making the same items for decades, sold through layers of traders and wholesalers before reaching local shops.
What Meesho Did: Vidit & Sanjeev understood this reality. These shops sold unbranded fashion products, and Fashnear would make them discoverable through hyperlocal search. Users could see shops near them on the app, select products to try at home, and get the convenience of online discovery with the trust of local retail. It was a smart insight: these small shops would never build their own e-commerce presence, but they could benefit from a platform that brought them online while preserving the local, personal shopping experience their customers valued.
The Lesson: Fashnear’s failure revealed something valuable. Every major e-commerce player was competing for the 25% of retail that was consolidating around branded products; nobody was building for the other ~75%. The real question now became: How do unbranded products actually get discovered and purchased in India? The answer came when Vidit stopped trying to build and started watching.
Insight 2: WhatsApp in India is the trust layer.
Consider what WhatsApp represents economically for small business owners in India: zero CAC, zero download friction, universal penetration across age groups and income levels, built-in social proof through groups, and informal trust networks established.
What Meesho Did: Vidit often sat in a boutique called Estilocanta in Koramangala for hours, just watching how customers shopped and how the business actually operated. The shopkeeper, a Malayali man who’d been running the store for years, noticed this guy camping in his store and eventually struck up a conversation. What he shared seemed impossible: he was doing 50-60% of his business through WhatsApp, not through the physical store.
He’d created a WhatsApp group with everyone who would walk into the store. When new inventory came in, he’d photograph it and send it to the group. When someone wanted to buy, he’d send a delivery boy to their home with the product. They’d pay cash on delivery. The entire transaction happened without the customer entering the store.
From this insight, Meesho was born. Short for “Meri Shop“, or “My Shop” in Hindi. The concept was to help SMB owners to manage inventory digitally, handle logistics efficiently, process payments smoothly.
The Lesson: Once they launched, they saw immense growth, but their power users weren’t the SMEs they built Meesho for. The unexpected user behaviour came from tens of millions of potential micro-entrepreneurs who weren’t running shops at all. These were homemakers, often in Tier 2/3 cities. Now the question was understanding who would drive distribution through these digital channels, and how.
Insight 3: India’s real entrepreneurs are hiding in WhatsApp groups
When Vidit looked at Meesho’s most engaged users, the pattern was clear but unexpected. These weren’t the SMB shop owners he’d built the product for. They were women in Gujarat, Uttar Pradesh, Rajasthan – running what they called “WhatsApp boutiques.”
Here’s how it worked: Housewives would browse Meesho’s catalogue, select products they thought their social circles would like, and then share in their WhatsApp groups. When their audience wanted to buy, the housewife would place the order through Meesho, add their 10-20% margin plus shipping, and collect payment on delivery. Pure intermediation – curating supply for demand in their personal networks.
For a shop owner, Meesho was a side project. For these women, it was everything.
This wasn’t an arbitrage to fix, it was the business model. In India’s Tier 2/3 cities, millions of women want financial independence but face cultural constraints on traditional employment. So India has always had invisible home businesses: beauty parlors in spare bedrooms, tuition classes for neighborhood kids, tiffin services, tailoring businesses.
What Meesho discovered was that these women had something more valuable than inventory: trust networks built over years. But the model had natural limits. To reach 500 million users – to become the platform for India’s masses – Meesho would need to evolve beyond resellers..
Insight 4: Tier 2 India doesn’t search, they scroll
Think about how you shop on Amazon: you have intent. You need laundry detergent, so you search “laundry detergent,” compare options, read reviews, and buy. The entire interface is built around search.
Now in a WhatsApp group: you’re not searching for anything specific. You’re browsing. Sunita sent you 15 new product photos. You scroll through them. Oh, that’s nice. Maybe I’ll buy it. Oh, this would look good on my sister.
What Meesho Did: The move to a marketplace in 2021 was a recognition that the discovery behavior resellers had perfected (browsing, not searching) could be systematised at scale through algorithms. When they transitioned, they didn’t build around search like Amazon or Flipkart; they kept the discovery-led shopping behaviour. The app was built around scrolling through curated feeds of products – more like browsing a bazaar.
The Lesson: Discovery-led commerce wasn’t a stepping stone to “real” search-based shopping. It was the permanent model for unbranded products. Meesho preserved what made resellers successful while removing their natural constraint of network size.
Insight 5: Low AOV can be a powerful moat (if your cost structure can support it!)
Conventional wisdom would say: increase AOVs and stay focused on resellers. But Meesho saw a business in a totally underserved market: 88% of India’s population lives outside the top eight cities. They’ll wait 20 days for delivery if the price is right. Amazon/Flipkart simply cannot serve this market profitably; their entire cost structure is built for higher AOV.
What Meesho Did: They launched a zero commission model to attract thousands of sellers with low-value, unbranded products that other platforms couldn’t list profitably. Meesho’s catalogue exploded with products that had no home elsewhere. The algorithm we talked about above would support this: prioritise local suppliers where shipping costs can be a smaller share of the basket.
But zero commission only works if you make money elsewhere. Meesho had two revenue streams:
- Advertising: With millions of sellers competing for visibility in those infinite scroll feeds, ad spend grew quickly. Sellers would pay to get their kurtas shown higher in the feed.
- Logistics fees: Sellers paid Meesho for shipping. If Meesho could fulfil deliveries cheaper than what sellers paid, they’d keep the margin.
The Lesson: Low AOV wasn’t a bug to fix, but a moat around cost structure. But to make it sustainable, Meesho would need to solve something no traditional logistics provider could: profitable delivery at massive scale for tiny order values. The fragmented logistics landscape everyone else saw as India’s weakness would become Meesho’s advantage…
Insight 6: Logistics fragmentation is a feature, not a bug
When you’re shipping a $2.40 kurta to a remote town, the $0.60-0.96 logistics cost destroys unit economics entirely.
And Meesho needed to reach thousands of pin codes across India – many in rural areas where traditional logistics players had minimal or no presence. The obvious solution – building owned logistics infrastructure with warehouses and delivery fleets – would require massive capital expenditure and years to scale.
India’s logistics landscape also presented a challenge: thousands of fragmented local operators, inconsistent quality, a lack of standardisation, and limited technology adoption. Every e-commerce player saw this fragmentation as something to overcome by building a centralised infrastructure. Meesho saw it differently.
What Meesho Did: Instead of building logistics infrastructure, they built Valmo – an orchestration platform that coordinates between thousands of logistics partners across India.
Here’s how it works: Valmo analyses each order – destination pin code, package weight, timing requirements, and available carriers in that region. Then it routes the order through the most efficient combination of local logistics partners. Valmo’s democratised logistics entrepreneurship. They created two distinct opportunity layers:
- Individual delivery pilots can earn $180-360 monthly with just a smartphone and a two-wheeler. Zero investment required, flexible hours, working in their local area with no long commutes. The onboarding is so simple that people can start earning within 24 hours.
- Delivery hub operators can build scalable logistics businesses with an investment of $1,200-2,400, earning $360-600 monthly by fulfilling orders. They coordinate logistics for their area – managing pickup from local sellers, sorting packages, and dispatching.
This model lets Meesho have a local presence in thousands of towns without building its own facilities, while creating sustainable businesses for entrepreneurs in Tier 2/3 cities where traditional logistics companies don’t operate profitably.
By 2024, it was managing 62% of all orders. Coverage expanded to 15,000 pin codes – reaching towns and villages where traditional 3PL players didn’t operate economically. And critically, Valmo reduced logistics costs by approximately 12% compared to using 3PL partners.
The Lesson: Orchestration at scale can be more powerful than infrastructure ownership, especially in fragmented markets. They enhanced the existing network of local logistics entrepreneurs rather than trying to replace them with centralised infrastructure – the same philosophy that made their reseller model successful, now applied to logistics.
With Meesho having filed for an IPO, it is proving that sustainable, large-scale businesses can be built by embracing India’s complexity rather than trying to simplify it away.
– Arjun Malhotra, General Partner, Good Capital
