Exclusive: Meesho takes on DealShare, CityMall with Farmiso integration

Social commerce major Meesho is looking to double down on its grocery offerings. The company is in the process of integrating its grocery arm Farmiso within its core app in a bid to expand the reach of its grocery deliveries in the coming months, people aware of the development said. 

“So far Farmiso has been a standalone app. But Meesho will bring it onto its main app to open up the service up to Meesho’s regular customers,” one of the persons mentioned above told Entrackr, requesting anonymity. 

Farmiso had started off in the early days of the pandemic by offering fresh farm produce which Entrackr had exclusively reported in February this year. However, it later pivoted to focusing on selling groceries through a network of resellers. 

The integration is seemingly a move to counter Tiger Global-backed DealShare and CityMall. These two companies have been scaling at a quick clip and there is a lot of interest from investors in the grocery focused social commerce model. Meesho’s foray into this model is set to intensify the competition between these players. 

DealShare and CityMall were early movers in the social commerce space with a sole focus on grocery. CityMall and Farmiso have the same reseller model whereas DealShare also has an element of group buying akin to China’s Pinduoduo. 

While DealShare is close to raising a new round at a valuation of over $1.5 billion, Citymall is in late-stage talks to corner $70 million in a potential round.

Entrackr had exclusively reported DealShare and CityMall’s potential fundings.

“What grocery delivery doesn’t have in quality, it makes up for it in quantity. Everyone knows that the margins in grocery delivery are razor-thin, but if you have a steady stream of recurring customers, you can offset some of those issues,” said a startup founder who used to run a company in this space, requesting anonymity.

Meanwhile, Meesho has also been ramping up hiring for the Farmiso team. “The Farmiso team is currently perhaps the single biggest team within the company with upwards of 400 people,” the first person said. “Of these, a number of people are city demand heads and city launch managers, who make up the bulk of the staff.” 

Meesho declined to comment on queries sent by Entrackr.

When Meesho announced its most recent financing round of $570 million in September, which valued the company at close to $5 billion, Meesho said it was looking to expand Farmiso’s presence to more than 200 cities. 

In an interview with Entrackr last month, Meesho’s CEO Vidit Aatrey had said: it was important for Meesho to gain a foothold in the grocery business because the kind of customers the firm serves spend a large chunk of their income on groceries.

Interestingly, Meesho’s entry into grocery has come at a time when several large players have entered the social commerce space. Flipkart has been aggressively pushing Shopsy while Swiggy is set to launch a Meesho kind of app: Swiggy Bazaar. 

Entrackr had exclusively reported about Swiggy Bazaar in October.