Meesho’s Pivot: From Social Commerce to E-Commerce

This case delves into Meesho’s pivotal decision to transition from a social commerce to a Business-to-Everyone (B2E) model in the Indian e-commerce sector, In 2021, Meesho, a social commerce company, established in 2015 by Vidit Aatrey and Sanjeev Barnwal, faced a pivotal strategic decision.

Initially designed to empower small-town entrepreneurs through social commerce, Meesho achieved substantial success by directly connecting vendors with consumers in underserved markets, significantly disrupting the Indian market and empowering millions of entrepreneurs, particularly women.

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However, by 2021, Meesho needed to decide whether to reinforce its social commerce stronghold or expand aggressively into the broader e-commerce market dominated by e-commerce giants like Amazon and Flipkart. This strategic pivot was intended to capitalize on Meesho’s established brand equity, robust logistics partnerships, and market momentum.

Despite a 4.5-fold increase in revenue to INR 32,520 million in FY 22, the company experienced a sevenfold increase in expenses to INR 32,470 million and faced financial strain due to a funding halt post-September 2021.

The pivot also strained relationships with its core reseller community, raising concerns about sustaining support for small-town entrepreneurs. The central dilemma involved deciding whether to maintain focus on social commerce, leveraging existing strengths, or transition to a full-fledged B2C e-commerce model.

This transition posed significant challenges, including maintaining product quality while scaling operations, catering to a price-sensitive tier 2+ market without compromising product integrity, and competing with established players with higher average order values (AOV). Navigating these complexities is crucial for Meesho’s future success.

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The decision at this critical juncture will shape Meesho’s ability to carve a sustainable niche in India’s dynamic ecommerce landscape. This case study examines Meesho’s strategic choices and their implications for competitive resilience, financial sustainability, reseller community satisfaction, and strategic adaptation.

The analysis underscores the complexity of Meesho’s transformative journey and the uncertainty surrounding its competitive position and strategic adaptation within the digital economy. In the face of new competitors, market expansion, employee turnover, and losses, Meesho needed to assess the sustainability of its reseller foundation and align its transition with its mission of “Democratizing Internet Commerce for Everyone.”

Critical questions lingered: Could Meesho successfully navigate the competitive eCommerce market? What would be the optimal strategy for Meesho in this competitive landscape, especially considering its mission and commitment to its reseller base? These uncertainties remained challenges for Meesho to address.

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The full research paper can be accessed here Dale, P., & Sainy, R. (2024). Redefining Retail Dynamics: The Meesho Story. Asian Case Research Journal, 28(04), 247-267. DOI: https://doi.org/10.1142/S0218927524500135