Meesho Shifts Strategy Toward Advertising and Financial Services

Indian e-commerce platform Meesho is pivoting its business strategy to prioritize profitability and new revenue streams, moving beyond its initial focus on user acquisition. The company aims to leverage its large user and seller base to drive growth through advertising and financial products.

Key Takeaways

• Advertising revenue: Meesho anticipates sponsored listings and related ad products will become significant contributors to its total revenue starting in the 2028 fiscal year.
• Financial growth: The company reported a 34% year-on-year increase in operational revenue for the second quarter of fiscal year 2027, reaching ₹4,119.9 crore.
• Marketplace metrics: Net merchandise value grew 23% to ₹12,911 crore, while the contribution margin improved to 6% of net merchandise value.
• Operational efficiency: Adjusted EBITDA losses narrowed to ₹130.5 crore in the second quarter of fiscal year 2027, down from ₹371 crore in the same period a year prior.
• New business lines: Management is exploring lending products for consumers and sellers, alongside expanding branded commerce via Meesho Mall.

Scaling Through Monetization

As of the second quarter of fiscal year 2027, Meesho reported 284 million annual transacting users and 1.13 million annual transacting sellers. The company intends to capitalize on this scale by implementing advertising solutions, such as sponsored listings, which allow sellers to increase product visibility. This approach offers a revenue stream that does not require the company to manage inventory or alter its low-cost model.

While the company has seen improvements in its contribution margins, management cautioned that the 6% margin reported in the second quarter of fiscal year 2027 is not necessarily a long-term baseline. Logistics efficiency gains may be reinvested to lower costs for consumers and sellers to sustain marketplace growth.