Meesho turns profitable with losses halved to Rs 1,675 cr in FY23
SoftBank-backed e-commerce firm Meesho on Friday said its loss narrowed 48.42 per cent from Rs 3,251 crore in FY22 to Rs 1,675 crore in FY23. The firm said that its continued topline growth was further augmented by operating leverage and an increased focus on efficiencies across a number of cost items, including customer acquisition cost, server and infrastructure cost.
Revenue from operations for FY 2022-23 grew by 77 per cent over the previous year to Rs 5,735 crore. This growth was achieved because of the company’s continued leadership position as the most downloaded shopping app in India in 2022 and 2023. There was an increased transaction frequency of its existing customers, a widening category mix and a redoubled focus on improving monetisation through various value-added seller services.
The company also revealed the audited H1FY 2023-24 performance. Here, the consolidated revenues from operations were Rs 3,521 crore (up 37 per cent year over year). The losses for the period were (Rs 141 crore), lower by 90 per cent Y-o-Y, while turning profitable in Q2 FY24.
“The revenue from operations in just these six months exceeded the full-year revenues of FY 2021-22,” said the company.
While the business continued to demonstrate sustainable growth, Meesho also became the first horizontal e-commerce company to turn profitable in India since July 2023 and has continued to remain so. “The positive momentum in the business continued post this period’s end and spilled into the festive season as well, where we witnessed continued growth across categories,” said the firm.
According to data.ai, Meesho recorded 14.5 crore app downloads in 2023 in India. The firm also crossed the milestone of 500 million downloads in H1FY 2023-24.
“Our growth in downloads is now largely coming from organic word-of-mouth-led momentum benefitting from the wide selection and low prices on the platform,” said the company.
By leveraging AI, the firm said it assists users in finding tailored products, integrating advanced features like computer vision, virtual assistants, and improved search options to enhance their shopping experience. Over two years, the focus on profitable growth through cost optimization initiatives, combined with operating leverage, has significantly enhanced its profitability, it said.
Meesho has been able to optimise the Selling, General & Administrative expenses (SG&A) significantly. SG&A has improved from 53 per cent of revenues in H1FY 2022-23 to 20 per cent in H1FY 2023-24. “Our asset-light marketplace business model is now proven to operate at not just positive unit economics, but overall positive profitability while generating free cash flow,” said the firm.
The company unveiled its strategic expansion by offering an array of branded products through ‘Meesho Mall’ for the festive season. Currently, Meesho Mall has partnered with over 500 national and regional brands. In the last 6 months, it has processed about 2 crore orders, with more than 75 per cent coming from tier 2+ cities.
Meesho has created a ‘Suraksha List’ comprising 1,800 brands identified as high-risk for infringement and counterfeiting. The project has yielded impressive results, deactivating nearly 42 lakh counterfeit and infringing product listings and 10 lakh restricted products in the past six months. The company has also taken on board nearly 25,000 non-GST sellers since October 2023.
In July, the GST Council provided exemption to small businesses having turnover below Rs 40 lakh in case of goods and Rs 20 lakh in case of services from GST registration for making intra-state supplies through an e-commerce platform. The rule kicked in on October 1.
“We have set forth a visionary objective to take on board 10 million small businesses by 2027, aiming to support their online success,” said Meesho whose current seller base is 1.5 million.
Elements:
Meesho said its loss narrowed 48.42 per cent from Rs 3,251 crore in FY22 to Rs 1,675 crore in FY23.
Revenue from operations for FY 2022-23 grew by 77 per cent over the previous year to Rs 5,735 crore.
● Cash flow positive for the entire period of H1FY 2023-24
According to data.ai, Meesho recorded 14.5 crore app downloads in 2023 in India.
The firm also crossed the milestone of 500 million downloads in H1FY 2023-24.
Onboarded nearly 25,000 non-GST sellers since October 2023.
Aiming to onboard 10 million small businesses by 2027
First Published: Dec 29 2023 | 7:48 PM IST