Meesho plans to cut costs as growth slows

By

Isabelle Crossley

Published
Jun 2, 2022

E-commerce business Meesho expects a slower pace of growth as big-ticket funding dries up and aims to reduce its monthly cash burn from between $40 million to $45 million at present to $25 million. 

Meesho expects its shipment volumes to drop by between 25% and 30% in the coming two financial quarters, the business told at least one of its third-party logistics partners. “There is a readjustment happening,” an anonymous source told the Economic Times referring to shipment volumes. “As one of the largest e-commerce players relying on third-party logistics, they [Meesho] work with us closely and plan things in advance and recently this was discussed.” 

Aiming to capture a significant portion of the market during the upcoming sale season to boost order volume, Meesho has begun its sale preparations already. The business launched cost-cutting initiative ‘Project Unbundle’ in January this year, a plan which had been in development since 2020. This initiative is designed to ‘unbundle’ or cut costs while also cutting services. 

One new feature is that products will be further discounted but are only eligible for returns if they are defective. Meesho has also cut customer acquisition costs, in line with other e-commerce players, and sees cost cutting as the route to enable it to compete with India’s top e-commerce platforms. 

The SoftBank-backed business began as a social commerce startup and entered the consumer-facing e-commerce market in 2021 to compete with giants Amazon and Flipkart. Meesho mainly retails value fashion, accessories, and other fast moving consumer goods.