Meesho posts higher FY24 revenue driven by spike in user base

Bengaluru: E-commerce startup Meesho on Wednesday reported higher revenue and narrower losses in FY24 as it benefited from an increase in annual transacting users and a rise in order frequency from existing customers.

In FY24, the company reported operating revenues of ₹7,615 crore, a 33% increase from a year earlier. Its adjusted losses narrowed by 97% to ₹53 crores excluding employee share based compensation expense, Meesho said in a statement. 

The company attributed the gains to improved efficiencies across multiple areas like logistics as well as leveraging generative AI and machine llearning for better discovery and improved in-app experience.

Meesho recorded 145 million unique annual transacting users in FY24, representing about 10% of India's purchases through its platform, it claimed. “Consumers are not just buying multiple items within the same category but are also turning to Meesho for a diverse range of their daily needs. As a result, home & kitchen, beauty & personal care, and baby essentials emerged as the fastest-growing categories,” the company said, adding that it has surpassed the overall 500 million install mark in the last financial year. 

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The Bengaluru-based startup has also seen a healthy growth in its order frequency per user which includes the influx of new-to-e-commerce users from India’s underserved markets. Over the last year, Meesho deployed AI models to analyse category preferences, demographics and time spent on the platform that contributed to better user interaction.

It also optimized logistics costs through Valmo, its logistics-focused platform launched in February. Since then, Valmo has expanded its network to include smaller and regional logistics partners, which has brought down shipping costs significantly. This has resulted in some loss of market share for major players like Delhivery, which had earlier serviced clients like Meesho.

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As of February, Meesho onboarded close to 3,000 regional micro entrepreneurs on its network clocking nearly a million shipments every day. It also reduced its costs by 5% and planned to further by 5-10% in the medium to long term.

“We have significantly reduced shipping expenses and improved delivery efficiency, allowing us to pass savings on to our users,” Meesho said in the statement on Wednesday. These in-house processes have contributed to a lower return-to-origin (RTO) rates and decreased costs associated with cash-on-delivery (CoD) orders.

In March, Meesho initiated its fourth and largest ever employee stock ownership plan (Esop) buyback programme, worth ₹200 crore or $25 million, which enabled wealth-creation opportunities for about 1,700 current and former employees. It became the first horizontal Indian e-commerce company to turn profitable in July 2023. While it did not disclose the profit it earned in July-September, it said it has remained profitable and cash-flow-positive ever since.

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Founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, the online shopping platform, backed by the likes of Softbank, WestBridge Capital and Fidelity Investments, gives small businesses and individual entrepreneurs access to millions of customers, pan-India logistics, payment services and customer-support capabilities.