Indian e-commerce platform Meesho has made a significant strategic move by venturing into the world of branded products. Now, Meesho users have the opportunity to purchase items from well-known national and regional brands such as Decathlon, Philips, and Bajaj. This expansion comes as a response to customer demands and brands’ aspirations to extend their presence in the online market. In this article, we’ll explore Meesho’s new venture and its potential impact on the e-commerce landscape.
Meeting Customer Demands
Meesho’s leap into the branded segment, known as Meesho Mall, has been motivated by the increasing number of users searching for branded products on their platform. Previously focused on unbranded products primarily offered by small and medium-sized sellers, Meesho recognized an untapped opportunity to cater to a broader consumer base. Dhiresh Bansal, Chief Financial Officer of Meesho, emphasized that this strategic move was in response to users seeking branded products and exploring alternatives when they weren’t readily available on Meesho.
Expanding Product Range During Festive Season
The timing of this expansion aligns with the festive season, a period marked by heightened consumer demand. Meesho aims to capitalize on this surge in demand by offering branded products through Meesho Mall. Additionally, the company has received interest from various brands looking to bolster their online presence and connect with consumers in smaller towns and cities.
Affordability Remains a Priority
Meesho is known for its commitment to affordability, and this philosophy extends to its branded product offerings. The price range of products available through Meesho Mall will remain between Rs 100 and Rs 2,000, aligning with Meesho’s unique selling proposition (USP) of providing budget-friendly options. Brands are actively investing in developing stock keeping units (SKUs) that cater to Meesho’s customer base, ensuring competitive pricing.
Meesho’s revenue model for its branded product segment involves charging a commission ranging from 4% to 5% from the participating brands. This commission structure enables Meesho to monetize its platform while providing brands with a channel to reach their target audience effectively.
Catering to Non-Metro Consumers
Meesho’s user base primarily comprises consumers from non-metro areas. This foray into branded products is expected to resonate with this demographic, as it opens up access to trusted brands and quality products that were not widely available through Meesho until now.
As Meesho expands its branded product offerings, it anticipates a shift in its revenue mix. Currently, online and offline branded sales constitute about 20% of certain categories, such as beauty and personal care (BPC), and up to 15% for fashion, lifestyle, home, kitchen, and electronic accessories. In the near to mid-term, Meesho aims to achieve a similar percentage of revenues from its branded product segment.
Meesho’s entry into the branded product market signifies a strategic pivot for the e-commerce platform. By offering a range of branded products while maintaining affordability, Meesho is well-positioned to capture a more extensive share of the e-commerce market and meet the diverse preferences of its user base. As it continues to evolve, Meesho’s expansion into the branded business arena may pave the way for new opportunities and growth in the competitive e-commerce landscape.
What is Meesho’s new venture into the branded products segment?
Meesho has expanded its offerings to include branded products, allowing users to purchase items from both national and regional brands such as Decathlon, Philips, and Bajaj.
Why did Meesho decide to enter the branded business space?
Meesho’s decision to enter the branded segment was driven by user demand for branded products on their platform. They recognized the need to cater to a broader customer base seeking trusted brands.
How does Meesho plan to maintain affordability while offering branded products?
Meesho remains committed to affordability by keeping the price range of products in Meesho Mall between Rs 100 and Rs 2,000. Brands are also developing products that align with Meesho’s pricing strategy.
What is Meesho’s revenue model for its branded product segment?
Meesho plans to generate revenue by charging a commission ranging from 4% to 5% from the brands participating in Meesho Mall.