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Armed with fresh funds, social commerce platform Meesho, which has been working on getting women entrepreneurs online, is now eyeing the e-grocery space. Vidit Aatrey talks to Venkata Susmita Biswas about getting small town consumers to shop for groceries online, and what deters small businesses from adopting the e-commerce model.
Meesho recently raised $300 million from SoftBank. Where do you plan to infuse these funds?
We will use it to add new businesses; grocery, for instance. Other than fashion and lifestyle, grocery will be our third key vertical for the next couple of years. The other plan is to build and scale up our technology and product teams. We are going to spend on marketing to get more and more women entrepreneurs to come to our platform.
Tell us about your foray into the e-grocery space. Is it aimed at adding a category with a higher frequency of purchase?
Yes, that’s right. A lot of our users hail from small towns. These consumers have rarely gone to online platforms to buy groceries thus far. They still mainly purchase groceries offline. We should be able to fill this gap in the small towns. We believe our customers can find a very affordable and convenient way of buying groceries online. We will introduce the grocery vertical across tier I, II and III markets. At the macro level, the southern states tend to do better than the northern states in terms of sales on the platform, because female literacy rate and empowerment is better in these states.
Social commerce has largely been about reselling in the fashion, beauty, home & kitchen, and electronics verticals. What are some of the hurdles you perceive as you diversify?
We will leverage our entrepreneurs for groceries, just as we do for the other categories. The model remains the same: local women entrepreneurs reaching out to their community via social media networks to sell their inventory. As a business, we have been very capital-efficient, and have never been one to follow the discounting strategy. We have not used shortcuts to onboard users, and we will continue to do so as we add more verticals and small businesses.
All those who run an online business need to pay GST, no matter what their monthly revenue is. However, the same does not hold true for offline sellers. This disparity in policy is what is holding back small businesses like kirana stores from selling online. Our women entrepreneurs may never be supported by their families to register for GST and do their taxes. That’s the biggest problem we want to solve over the next two years.
Going by your advertisements, you seem to be focussing more on roping in sellers/entrepreneurs than consumers…
Our focus is to bring all small businesses in the country online. For the last five years, our women entrepreneurs have been able to create an identity and earn using our platform. Our long-term vision is to get 10 crore small businesses online. We will continue to focus on adding more entrepreneurs right now, and transition to the next level of communicating to users in good time.
Restrictions on non-essential e-commerce have been imposed in several states. How badly does that impact the business?
Consumers do not go offline to purchase products from our resellers when bans on non-essential e-commerce are imposed. All these SMBs rely purely on online sales for monthly incomes. Therefore, I believe governments must allow e-commerce of all kinds when they impose lockdowns in view of the pandemic so that small businesses can continue to survive. In the past, during the intense national lockdown, many such businesses shut shop as they could not stay afloat. We do not want to have the same level of casualty this year.
Apart from the fee you charge resellers, what other streams of revenue are you exploring?
The commission revenue stream is scaling up very well. We added the advertising revenue stream recently. The ads we run on the platform are product listings — a seller can promote a particular product. These ads are focussed only on making small businesses successful. We do not have ad formats where non-sellers can advertise. The 10 crore SMBs that we want to bring online are our potential advertisers, and that should be sufficient for us. We will not have to earn revenue from non-sellers.