Monetising your social media circles

That’s when Aatrey realized that since this business behavior already existed, he could enable boutique brands to sell more efficiently. By aggregating specialist wholesalers, by providing last-mile logistics to them, and a payments layer to sellers, Meesho functioned as an enabler of social commerce. “We just left the stock curation up to the re-seller, we don’t want to play any part in that,” says Aatrey.

Generating the revenue

A Delhi-based boutique owner, Ranika, who listed on Meesho in March, says she is able to generate sales worth Rs 15,000 ($213.4) every month by spending her free-time promoting her stock on WhatsApp groups. She sells garments and lifestyle accessories sourced from suppliers.

She says that onboarding Meesho can be done through Meesho’s app; within five minutes, she had an online storefront with a permanent link. She controls her inventory mix on the Meesho app, and whenever she gets new inventory, she simply uploads images of her fresh inventory on the Meesho app and shares it on WhatsApp groups. Once you select the stock to be promoted, Meesho’s app converts this into shareable images with a short description for WhatsApp and Facebook groups. Each successful sale gets Ranika a 20-25% commission.

Aatrey says that Meesho aims to be the ‘Robin Hood” of small sellers (particularly homemakers and students), setting them free from the shackles of inventory ownership. But these re-sellers have a threshold (in terms of sales volumes and customer base) and they aren’t always active throughout the year.

Not all boutique stores led by housewives and small sellers want to go big. They are happy enough selling to a limited circle of customers. As such, Meesho will have to find a way to break that threshold for re-sellers who wish to go big or keep adding new re-sellers on a continuous basis in order to grow.

The rise of platforms like Meesho is due to the spike in smartphone penetration and social media usage in India. It gave rise to a whole new breed of sellers. Sellers who took to Facebook and WhatsApp groups to create a captive demand base for their products.

On the other hand, small to mid-sized wholesalers, who largely depended on offline third-party retailers, are now going online with this new breed of social media sellers. Social media users slowly found their way into the supply chain of small manufacturers and wholesalers. It’s indeed a new phenomenon, and it is now slowly disrupting the small-to-medium retail segment in India.

In touch with the potential customers

Experts call it social e-commerce, where sellers are constantly in touch with potential customers. Here, customers have all their questions answered by sellers, and to some extent, can even have the product personalized before shipping. Sellers, on the other hand, have complete freedom to curate their own inventory, with ownership being optional.

“These [social media sellers] sell unique products… They are constantly in touch with their customers and always match their stock to the customer’s sensibility… They are mostly small home-based entrepreneurs who use WhatsApp to sell, and a business built around this is mostly a software play,” says Chowdhri.

Meesho is a two-sided platform. It connects more than 22,000 suppliers (or wholesalers) to one million registered “re-sellers”, as the company calls them. Aatrey says that 60% of the company’s seller base consists of housewives selling goods like custom-made cakes, artisanal products, fashion and lifestyle products, etc. Students and retirees are the next biggest seller base for the company. Even students from fashion institutes use Meesho to source materials from the platform’s many suppliers.

Aatrey claims that a typical Meesho seller makes anywhere between Rs 10,000-15,000 ($142-$213) per month, adding that each seller caters to anywhere up to 150-200 customers. Industry experts told The Ken that no one really has a good estimate of how many such social sellers exist in India. However, much of the social commerce phenomenon can be traced back to the direct selling model spearheaded by companies like Amway, Tupperware, etc.