Bengaluru-based Meesho is a pioneer in the growing social-commerce space, allowing users to sell items by sharing product catalogs with friends through Meta Platforms Inc.’s popular WhatsApp messaging service, along with Facebook and Instagram. Meta is also an investor in Meesho with an undisclosed stake.
Meesho was the world’s most downloaded shopping app during the first half of this year, according to app analytics firm Apptopia, with shoppers pointing to its ease of use, wide selection of products and low prices. About 127 million people downloaded the app, which is only available in India, during this period, compared to 81 million for Amazon and 50 million for Flipkart.
Meesho’s chief financial officer Dhiresh Bansal said Amazon and Flipkart are “more for the top 1%-5% of the population” in terms of income, specializing in more expensive goods such as smartphones and TVs.
Meesho aims to be the online leader in simple items like clothing and home goods, which are often sold in the unorganized retail sector, which accounts for 85% of India’s shopping sector, Mr. Bansal said. He said the startup caters to the number of consumers who are used to shopping in corner stores and are now turning to the internet.
Meesho was founded in 2015 and has raised $1.1 billion from investors including Meta, SoftBank Group Corp’s vision fund, Sequoia Capital India and B Capital Group, the venture-capital fund of Facebook co-founder Eduardo Saverin. Meesho is not profitable, but Mr. Bansal said it will at some point and aim to list publicly. Its value is about 5 billion dollars.
Meesho has a way of catching up to Amazon and Walmart, which have invested more than $22 billion in India since 2014. According to a report, each makes about $ 20 billion in online sales annually in India, which is about 60% of India’s total. From American investment firm AllianceBernstein. Meesho is responsible for about $5 billion or 7% of India’s total sales.
US firms entered India for the first time in the South Asian country to capitalize on the millions of consumers going online, although the growth of online shopping as a proportion of total retail has been slow compared to other large markets. According to AllianceBernstein, e-commerce still accounts for just 5% of retail sales, well below the global average of 14%.
According to Alliance Bernstein, India’s e-commerce market is projected to nearly double to $133 billion in 2025 from $72 billion this year, driven by consumers in small towns and villages.
Eighteen-year-old college student Mansi Khajuria lives in a village of several thousand called Baruki in the northern Indian state of Uttar Pradesh. She has shopped on Amazon many times but she has never tried Flipkart.
She loves Meesho’s wide selection of accessories, often buying items like tops for 99 rupees, or $1.20, and shoes for $1.46.
“Misho is my Zara,” said Ms Khajuria, referring to the Spanish-owned Inditex-owned fashion retailer she’s heard about but can’t stand.
Customers open Meesho—its name is a combination of the Hindi word “my” and the English word “shop”—and browse a TikTok-like feed. It mostly shows non-branded items such as sarees, sunglasses and shampoo, many of which cost less than Amazon or Flipkart.
Users can order products and pay with cash upon arrival at their doorstep. Shipping is free, and there is no minimum order size. Sellers set their own profit margins. For example, Ms. Khajuria often sells items to friends via WhatsApp and Facebook, for between 61 cents and $1.22 per transaction.
Meesho generates revenue largely through advertising, sellers pay to have their items displayed more prominently in the app, just as China’s Alibaba Group Holding Ltd makes money from its popular Taobao shopping service.
According to Apptopia, Meesho’s app was opened more than 1.4 billion times by its users in India last month, compared to around 875 million for Flipkart’s app and 570 million for Amazon.
Amazon, which has invested $6.5 billion in its India operations since its launch in the country in 2013, entered the social-commerce market in April, acquiring a startup called Glowroad for an undisclosed amount. An Amazon spokeswoman did not respond to a request for comment on Meesho.
Flipkart, which started operations in 2007, launched a social-commerce platform called Shopsy last year. A Flipkart spokesperson said that Shopsy is growing rapidly but declined to comment on Meesho. Walmart acquired Flipkart for $16 billion in 2018 and led a $1.2 billion investment in the company two years later.
Other companies are also emerging in India’s developing e-commerce sector. These include ultrafast delivery startups, such as Dunzo and Zepto; Local giants Reliance Industries and the Tata group are both foraying into e-commerce; and the Indian government, which last month launched a limited launch of its own e-commerce aggregator.
The aggregator, which includes listings from Amazon, Meesho and others, allows consumers to search, compare prices, and shop on the platform. The government says it has been created to democratize online shopping and empower small players. A Flipkart spokesperson declined to comment on whether the company would participate.
Ms Khajuria said she is looking forward to selling and shopping more on Meesho this month ahead of Diwali, the festival of lights which is one of India’s main holidays.
“Everyone does shopping during the festival season,” she said. “With more money, I’ll buy more.”
—Vibhuti Agarwal contributed to this article.