Meesho IPO: These three key factors set Meesho apart from Flipkart and Amazon India

Incorporated in December 2015, Bengaluru-based Meesho operates an e-commerce marketplace that connects four key stakeholders: consumers, sellers, logistics partners and content creators, through its technology-first platform.

Despite lacking the first-mover advantage in the e-commerce industry compared to its rivals Flipkart and Amazon India, Meesho has managed to scale its operations very rapidly as indicated by its considerable growth in annual transacting users, which grew at a CAGR of 20.7% from 13.6 crore to 19.8 crore in the last three fiscal years.

Rather than depending on discount-heavy sales trends, Meesho has followed the everyday low prices strategy. The company’s management recently said they want to offer the lowest possible prices in every category, supported by zero-commission for sellers and zero platform fees for consumers.

How Meesho's business model differs from Flipkart and Amazon India

As evident from the above table, Meesho's business strategy differs from its rivals, Flipkart and Amazon India. Meesho has built its entire business for the price-conscious consumers from Tier-2 and Tier-3 cities and rural India.

In FY25, 19.87 crore annual transacting users shopped on Meesho, of which 17.44 crore were from outside the top 8 cities in India, while 54.22% of its consumers in FY25 were women.

Another key data point is Meesho’s average order value (AOV), which has reduced from ₹336.71 in FY23 to ₹274.27 in FY25. In the first two quarters of FY26, the AOV declined further to ₹265.50, which indicated that the company’s core buyers are not purchasing high-value products like electronics or branded goods, but they are making small and affordable purchases multiple times.

How did Meesho manage to move ahead in the IPO race?

Zero-commission model

Meesho operates on a zero-commission model for sellers. Unlike Flipkart and Amazon, which generally take 5% to 25% commission on platform sales, Meesho does take a cut in sales through its platform; rather, it generates revenue from logistics services, advertising and seller insights.

This helps the company attract a diverse set of seller base, which offer products at lower prices to end consumers because of the zero-commission model. In FY23, annual transacting sellers on the Meesho platform stood at 449,966, which grew by 14% to 513,757 sellers in FY25.

Social commerce

Meesho is also investing heavily in its content commerce ecosystem, which means e-commerce purchases are directly influenced by content created and distributed by content creators or influencers.

In FY25, the company had 27,836 active content creators on its platform who posted 448,183 order-generating content on a cumulative basis, generating ₹7.07 billion in net merchandise value (NMV) from its marketplace through content commerce.

Growing in-house logistics business

The company’s in-house logistics services, Valmo, processed 763.51 million shipped orders in FY25, representing 48% of total shipped orders, while the rest of the orders were processed by third-party logistics service providers like Delhivery, Xpressbees and Shadowfax.

Valmo's share in total shipped orders has increased considerably from 1.83% in FY23 to 64.5% for the six months ended September 30. In-house logistics services help the company gain more control and potentially lower costs.

Overall, Meesho's focus on value-conscious consumers and efficient business model has helped the company gain market share in the highly competitive e-commerce industry. Meanwhile, Flipkart also has IPO aspirations and plans to kickstart the process soon. In April 2025, the Flipkart board approved a plan to shift the holding company's base from Singapore to India. However, the IPO has faced delays as the company has a complex business structure comprising e-commerce, quick commerce and fintech verticals.

Meanwhile, US-based e-commerce giant Amazon is reportedly planning to spin off its Indian operations and list it as a separate entity. However, IPO talks are currently in the initial stage.

FY25 financial snapshot

All the leading e-commerce players are currently making losses, focusing more on scaling operations at the cost of short-term losses. In FY25, Meesho's net loss widened to ₹3,941.7 crore from ₹327.6 crore in FY24 mainly because of one-time exceptional costs related to corporate restructuring. The company had to pay a one-time tax expense of ₹2,487 crore to change its domicile from the US to India. Besides this, the company saw an exceptional cost of ₹1,346 related to vesting of ESOPs and reorganisation.

If these one-time expenses are removed the real net loss of the company is around ₹108 crore, which is less compared to its competitors and almost reaches the breakeven point. In fact, the company reported free cash flow of ₹591.2 crore in FY25 and ₹581.4 crore in the six months ended September 30. In short, the company’s core business operations showed stronger growth and efficiency which is reflected in FY25 revenue.