Meesho has very swiftly moved beyond a platform helping direct sellers to direct e-commerce. The target market is Sec-C and Sec-D, complement of what Cred is targeting.
Unlike SecA and SecB consumers, these users are not brand conscious but very very sensitive to price. If you go and search Meesho now, you can find shirts below 500 and no brands are present.
Operating in this section opens up huge opportunities for Meesho - building its own white label brand. Although Myntra has launched their own brands, I would still say they had limited success because the segment is very very brand sensitive. The white label brands launched by Myntra can't exercise price leverage as people will start opting for known brands while the limited quantities do not allow them the advantage of scale.
Now let's look at Meesho, it is easier for them to establish a mid budget quality brand at an affordable price (think of vishal mart, etc) and increase the price premium over the unorganised segment. The sheer volume of secC and SecD allow it to maximise cost leverage via volume.
In the long term, I even see Meesho entering into direct contracts with manufacturers for white-label brands just like target did and increasing market share as well as profit margins.
#startups #ecommerce #Meesho #businessmodels #strategy