It is a well-known fact that the startup scene in India, especially in the e-commerce sector, is quite strong because of the awareness that there is a lot of population in India and a majority of them being in their 18-45 age range means that the adoption of e-commerce in the country has been a lot faster compared to other parts of the world. This also means that the spending power of the population has also increased as they like to be in the trend and want to try out the latest fashion. This is where e-commerce platforms like Meesho, as well as Temu in the US, become so popular because they provide items at cheap rates which means that people are attracted towards them thinking of it as disposable items.
Talking about Meesho, it can be said that the brand’s reputation in the e-commerce sector is not the greatest because of its lacklustre customer service as well as poor quality of clothes etc. But still, we can see that it works for the customers because the company just posted its first-ever profitable quarter in years. Meesho, powered by Japan’s SoftBank, said that “Its revenue between January-June was more than $400 million, and Meesho expects it to cross $800 million by the year-end”.
Meesho’s CFO Dhiresh Bansal said that “Since we just turned from negative to positive, it’s a small nominal kind of number, single digit of course… We intend to continue the profitability trajectory,” as he added that “We feel that the growth, scale and profitability are there (for an IPO), but you also want to make sure that there is enough of a track record for market investors to look at.” Aiming for the top, Meesho’s CFO also said that they are looking to launch an IPO in the next 12-18 months. But as always, we know that the talks of IPO can go out of question very soon if the profitability of the company does not stick which was the case with a lot of other startups in the last few years. Not only Meesho, India’s Zomato which is a food delivery service also turned profitable this year.