Meesho claims Indian e-commerce first with positive cash flow
Reading Time: 2 minutesMeesho has become India’s first horizontal e-commerce firm to generate positive cash flow, marking a significant shift in a market where profitability has long remained elusive even as new competitive threats emerge.
The SoftBank and Prosus-backed startup, which serves customers in smaller Indian cities and towns, reported positive operating cash flow of ₹232 crores ($27.6 million) for the financial year ending March 2024, while growing operating revenues by 33% to ₹7,615 crores ($905.6 million). Its adjusted losses fell 97% from ₹1,569 crores to just ₹53 crores.
Meesho’s growth remains faster than the e-commerce’s surge in India. India’s e-commerce industry growth is expected to moderate to 17% in 2024 before accelerating to 20% in 2025, Bank of America analysts said this week. This relatively slower growth is attributed to consumption slowdown impact and slower apparel industry growth.
Flipkart’s marketplace arm grew its revenue by 21% to $2.12 billion in the financial year ending March, it disclosed in filings this week. Its losses fell 41% to $280.4 million.
The Indian commerce market is simultaneously being reshaped by quick commerce firms in urban cities. Blinkit, Zomato’s quick commerce arm, has expanded the network of so-called dark stores — the warehouses where it stores the inventory — and increased SKUs from 4-5,000 to over 10,000. The platform has also introduced new features including payment installment options for purchases above ₹3,000 ($35.7), 10-minute returns for clothing and footwear, and split shipments to expand its reach.
For established players, the battle increasingly also appears to be about controlling the full stack. Both Amazon and Flipkart now handle about 90% of their deliveries in-house, while Meesho has launched its own logistics service called Valmo to optimize shipping costs. Valmo is handling roughly 35% of all Meesho orders, Bank of America says.
The shift comes as competition for India’s next hundred million internet shoppers intensifies. Meesho reports that 45% of its customers now come from tier 4 cities and beyond, with 145 million unique annual transacting users – representing approximately 10% of India’s population.
‘We’re also seeing a substantial influx of new-to-e-commerce users, demonstrating our success in acquiring customers from India’s underserved markets,’ Meesho said in a statement. ‘This not only highlights the vast potential for e-commerce in India but also underscores our vital role in making e-commerce accessible to regions that have historically been overlooked.’
Bank of America expects around 120 million new online shoppers to enter the e-commerce market over the 2024-27 period, with the base likely to reach 380 million. Approximately 75% of these new users are expected to come from Tier-2/3 cities, representing a distinct cohort of first-time online shoppers.
Ref: techcrunch
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