In a strategic move to bolster its market presence and drive profitability, e-commerce giant Meesho is branching out into financial services and amplifying its grocery delivery operations in the coming fiscal year. This shift is part of a broader trend in the online commerce sector where platforms are increasingly seeking sustainable profitability.
Sources close to the development shared that Meesho is gearing up to launch a credit marketplace. This platform will connect borrowers with lending partners like banks and Non-Banking Financial Companies (NBFCs), with Meesho earning a commission for every loan disbursed.
An inside source at Meesho, preferring anonymity, mentioned, “We’re in the initial stages of testing a lending platform. It’s a significant area of internal focus for us.”
A spokesperson for Meesho shed light on the company’s multiple new ventures, saying, “We are piloting projects in financial services and grocery delivery, among others. Our initiatives aim at quickening payment processes for sellers, fostering financial inclusion, and boosting small business growth.”
Backed by influential investor SoftBank, Meesho is re-entering the grocery delivery market. Plans are in motion to start the service in one or two cities from April, with further expansion contingent on its success.
A senior executive in the fintech sector commented, “It’s logical for e-commerce companies with vast user bases to foray into financial services, but it requires substantial investment due to regulatory demands.”
Meesho’s ambitions stretch beyond just generating leads for its lending partners. The company is keen on developing its own credit underwriting models and offering a comprehensive suite of credit products.
“With these new initiatives, we are targeting accelerated growth in the upcoming fiscal year,” revealed sources within Meesho. The company is also reportedly seeking a senior executive to spearhead the lending division and establish an in-house team for credit risk and data science.
Meesho’s strategy includes starting with merchant loans before extending its lending services to consumers, especially in smaller cities. This approach is aligned with the platform’s lower average selling prices.
The company has shown promising financial progress, with a 48% reduction in losses to Rs 1,675 crore in 2023, while its operating revenue surged by 77% to Rs 5,735 crore.
Furthermore, Flipkart’s group chief executive Kalyan Krishnamurthy recently announced at a townhall meeting that their grocery segment experienced a 50% year-on-year growth in 2023.
Adding to the company’s list of achievements, Meesho reported its first-ever profits in July of the previous year, marking a significant turning point in its journey.