Even though 10-15 minute deliveries are all the rage among India’s top e-grocers, Meesho will never build for express deliveries with its grocery arm, Farmiso, since the company’s customer base would not want it, a top executive of the company said.
“If you see all of these products [delivered via express delivery] they end up being much more expensive than the conventional model. But the kind of customers we serve would not be willing to pay an extra 15-20% because they want things in 10 minutes. They are happy to wait for a day,” Meesho’s CEO Vidit Aatrey told Entrackr during an exclusive interaction last Thursday.
This comes at a time when express delivery for groceries has marked a new race between India’s key e-grocers with companies like Grofers, Dunzo, Swiggy and BigBasket, all promising deliveries within 15-20 minutes, operating out of a dark store model.
Meesho has plans to double down on grocery delivery through Farmiso, its online grocery delivery service which started out as a platform to order fresh produce from before pivoting to groceries.
While announcing its latest financing round of $570 million, which valued the company at close to $5 billion, Meesho said it was looking to expand Farmiso’s presence to more than 200 cities. As of now, it is only operational in some cities in Karnataka.
Even though Farmiso is yet to gain any considerable traction, Aatrey said that it is important for Meesho to focus on grocery delivery because the kind of customers the company serves have a wallet spend where groceries have a significant share.
“So it is very important for us to own that wallet-spend. And we don’t do it in large cities. We do it in small towns and cities in Karnataka, apart from Bangalore, and we are opening up in more and more towns and cities. Today we are in some 25 plus towns and cities,” Aatrey said.
Entrackr was the first to report on Meesho’s foray into the grocery delivery space in March last year.
Farmiso, Aatrey said, has a community group model where it leverages a community leader—someone local—most likely a grocery shop owner who would aggregate orders and also do the last mile for the company to reduce logistical costs.
Aatrey declined to comment on the numbers or volumes that Farmiso was currently clocking.
From a reseller led platform to a consumer internet platform
Meesho started out as a reseller led platform where it helped these resellers not only source their products, but also provide logistics and tech support. But, in the last one-and-a-half years, the share of Meesho’s consumers — most from tier 2 and tier 3 towns — buying directly from the company has been increasing.
“…we realised that in the long run, more and more people will come directly to us. So we need to be a platform that can support those coming to us and buying from us,” Aatrey said.
This move, however, puts Meesho squarely in competition with giants like Amazon and Flipkart. When asked about comparisons with the marketplace giants, Aatrey said that “a couple of years ago, Paytm launched a clone of ours, Snapdeal did, and now Flipkart has also launched something… To us competition doesn’t matter as much.”
Aatrey follows the same nonchalance about the competition from Shopsy, Flipkart’s social commerce app. He said, “lots of clones have come, this [Shopsy] is another clone. They [Flipkart] have copied the same app. And so far it has been there for a few months and I haven’t seen any of our users use it”.
Meesho’s top three states in terms of volume are Tamil Nadu, Maharashtra and Uttar Pradesh, Aatrey revealed. “We have very high penetration even in the northeast, where I think we do more orders than any other player in the country. We also do the most orders in the Andaman and Nicobar islands,” he added.
Aatrey declined to comment on the split between direct customer orders and reseller fulfilled orders but he said the volume of direct orders placed by consumers is now bigger than the orders serviced by resellers on the platform.
