How this unicorn e-tailer is penetrating tier 2, 3 and 4 cities?, Retail News, ET Retail

How this unicorn e-tailer is penetrating tier 2, 3 and 4 cities?, Retail News, ET Retail

How this unicorn e-tailer is penetrating tier 2, 3 and 4 cities?

New Delhi: The e-commerce industry has been growing at a fast pace. With larger penetration of the internet in tier 2 cities and beyond, e-tailers are able to fulfil the consumers demand more conveniently. In order to increase the customer base, the need for more sellers have emerged on e-commerce platforms. Although, with several technological innovations, small sellers are getting a chance to reach a larger consumer base through online platforms across the country.

But the majority of the sellers are not Tech Savvy and from various regions with different language understanding, it is a difficult task to onboard new sellers and retain them with the online platform for a longer time. Though a lot of efforts have been put in this area.

Softbank-backed online platform Meesho, like several other homegrown players, is also working on onboarding sellers from tier 3 and tier 4 regions.

Onboarding sellers and Digitisation

Currently, there are about 8 lakh sellers on Meesho’s platform. Nearly 41 per cent of them come from tier 2 regions such as Hisar, Panipat and Tiruppur, among others while 24 per cent are from tier 4 regions. To help small businesses come online, the e-commerce unicorn had previously introduced industry-first initiatives like Zero per cent commission, Zero Penalty and 7-Day Payments.

On their aim to digitise small businesses at scale, Sanjeev Barnwal, co-founder and CTO of Meesho told ETRetail in an interview, “We do not differentiate between sellers on the basis of tiers.” This provides a level playing field and democratization of internet commerce for the smallest of sellers. He added, sellers do not face any competition or threat from private label brands, nor is there an inventory-led play.

Technology and Innovations

Keeping up the pace in technology and innovation, the e-tailer said it personalizes users’ feeds in real-time as per their browsing behaviour. Barnwal said, “We operate at 2,50,000 requests per second and expect to reach 4,50,000 requests per second in near future.”

On the supplier side, the company is working on demand forecasting, product recommendations and predicting the pin codes to increase capacity.

To target regional users, Meesho had also added vernacular languages this year besides Hindi and English including Bengali, Telugu, Marathi, Tamil, Gujarati, Kannada, Malayalam and Odia.

Last mile deliveries in Tier 2, 3 and 4 cities

Speaking about the last mile delivery partners, Barnwal said they have recently partnered with DTDC, Loadshare Networks and rural-focused Elastic Run to further augment its delivery infrastructure.

The collaboration with these three national logistics players apart from Meesho’s existing third-party logistics (3PL) partners Delhivery, Shadowfax, Xpressbees and Ecom Express — is complementing the company’s delivery capabilities in high-demand regions such as West Bengal, Maharashtra, Karnataka, the Northeast states and Uttar Pradesh.

Working with its 3PL partners, the company wants to devise tech-based solutions for improving the accuracy of customers’ addresses for a smooth delivery experience in tier-2 markets.

Impact of National Logistics Policy

Sharing about the recently announced National Logistics Policy (NLP) by Prime Minister Narendra Modi on 17 September, Barnwal said the policy is a step in the right direction as it looks to increase efficiencies across supply chains and bring down overall logistics costs from the current 14 per cent to single digits. That’s likely to improve the competitiveness of Indian products and bring down costs for the end-consumer.

He asserted that the government’s policy initiatives such as Make in India and Production-Linked Schemes (PLI) act as a growth booster for small sellers.

With the GST Council’s decision to exempt small online businesses from mandatory registration – Small businesses will now be able to go beyond their local catchment areas and access a much wider customer base, leveraging the pan-India reach of digital, Barnwal explained.

Moreover, small businesses that operate online can grow twice as fast as their offline peers. This will boost their income potential and help them become resilient to local economic shocks. With this, more entrepreneurs will be incentivised to set up their businesses, driving job creation in turn.

Meesho, being a horizontal platform, sells products from a large number of categories. Currently, it sees a strong surge in demand across categories like fashion, home & kitchen, furnishings, consumer electronics and accessories.

The ecommerce platform also has the lowest gross merchandising value (GMV) concentration by suppliers in the industry, as the company said.

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