Does Flipkart consider Meesho as a threat in the e-commerce platform?

With the growth of the various e-commerce platforms, the competition has been intense and rapidly increasing. After severely competing with the big e-commerce platform, the Walmart-owned company named Flipkart has found itself a new rival: the Softbank-backed Meesho.

Meesho has arisen newly and gained its popularity in the e-commerce market in India after Snapdeal and Shopclues have severely deteriorated and Amazon and Flipkart took over the Indian Market. Will Meesho gain victory over Flipkart- the online platform that has dominated the Indian market for years?

Let us move forward with the article to know more about the topic.

The News has made it to the limelight as it was revealed by two of the people working with Flipkart that Flipkart has now become a war field and it comprises around twenty to thirty executives dedicated completely to Meesho. It has also been revealed that the company is becoming Meesho-focused internally. The topic concerning the competition is talked about multiple times a day.

Information received from two more executives working for Flipkart have opened up the fact that Flipkart has also informally asked third-party delivery partners in India that include Delhivery, Ecom Express, Shadow fax, and XpressBees in order to put an end to the commitments with Meesho. 

The action taken by Flipkart is assumed to be an attempt to remove their competition from the market. It is because of the fact that Amazon and Flipkart are the only two companies that have their own logistics provider while Meesho is completely dependent on the third-party logistics provider for the delivery of their products. The latter also has to provide 40 to 50 percent of the revenue to the third-party logistics provide while Flipkart is only dependent on 5 percent of its deliveries. 

Moreover, it has also been brought into notice that the latter provides a higher delivery ecosystem for the third party as compared to Flipkart. The former receives around 2 million orders every day compared to the count of 2.5 million that is received by Amazon and Flipkart.

Based on the data, it is evident that the third-party logistics are much more dependent on Meesho than Flipkart, Meesho serving them a higher delivery rate. This implies that Flipkart’s move would not be successful as the later is now a much larger part of the delivery partners. Also, Meesho is helping them in order to regain the investments that they have made in small cities.

The battle between the two e-commerce platforms has worsened because of the fact that both of the online applications cater to the same needs of the people. The Indian shoppers can be broadly classified into two categories: one group of people values quality over price whereas the other group of people opts for convenience over quality. 

Flipkart has already catered to the needs of the people who are ready to pay a price to receive a speedy delivery. But, the competitor addresses the problem of price rather than convenience. It does not offer within one-day delivery promises to the customers as offered by another e-commerce platform named Amazon. But, they are ensuring that the buyers will get a good deal for the prices they have paid for, no matter how much duration it takes for the delivery. 

In addition, Meesho works with the largest logistic companies anf=d has gained a huge amount of customers for itself. The logistics team does not care about the value of the items but is more focused on the volume and the weight. These criteria are extremely important for their business. 

When we look at the planning of Meesho and their tagline, we can conclude that they have drawn inspiration from various Chinese and Southeast companies. The goal is to deliver the smallest of items at the lowest prices that attract the customers to purchase more from their site.

The Backstory of Meesho:

Meesho was founded by the IIT graduates Vidit Aatrey and Sanjeev Barnwal in the year 2015. Initially, Meesho started out as a social commerce platform that included three fields: the supplier, resellers, and the customers. The resellers would purchase end products from the suppliers and later sell them to the customers. Though Meesho was started as a social e-commerce platform, it has grown substantially.

Comparison Between Meesho and Flipkart:

Currently, Meesho derives 75 percent of the earnings directly from the social application while the other 25 percent is received from the resellers.

Interestingly, Flipkart has also tried to bring this concept into action and further launched an application named Shopsy to bring the suppliers, resellers, and customers together. Flipkart has shared its sweet success as within 100 days of launch, the application has gathered a total of 2.5 million sellers.

Other than that, while Meesho is in the race with Flipkart, its average order value is far less than Flipkart accounting for around 400 to 500 INR while the latter has an average order value of around 2000 to 3000 INR. this is because of the fact that Flipkart covers all the segments of marketing while Meesho has stuck to homecare and fashion.

In regards to funding, it has been reported by an investor that the newer share of the capital is significantly inclining towards Meesho. The e-commerce funding has also been divided between the two online applications.

Wrap Up: 

Flipkart was launched in the year 2007. It has attained great value after serving for more than a decade whereas Meesho that has been in operation for six years has already made it to the running with Flipkart. That itself seems an achievement. While Meesho prioritizes the selling of goods at a lower rate, this has also attracted a wide array of customers. But, the only limitation between Flipkart and Meesho lies in the fact that the former addresses all of our shopping concerns ranging from electronics to groceries. Thus, the average order value has also increased significantly.

Five years from now, as the e-commerce scenario would change completely, we can observe Meesho be popular among the customers and it can be a serious threat to Flipkart as well.

edited and proofread by nikita sharma