Meesho Leverages AI and Business Diversification for Growth and Profitability

Post by : Mara Rahim

Indian e-commerce giant Meesho, backed by SoftBank, is honing its focus on artificial intelligence and diversifying its business lines to bolster its user base and enhance profitability. CEO Vidit Aatrey shared with Reuters the company’s vision to remain competitive in India's vast online retail landscape.

In preparation for its initial public offering (IPO), Meesho is eyeing a valuation of as much as $5.6 billion. The three-day share offer is set to commence on December 3, and shares are expected to commence trading on India's major stock exchanges on December 10. The funds raised will be utilized to enhance technological capabilities, marketing, and logistics.

Meesho has carved a distinct place in the market by offering cost-effective products without imposing commissions on sellers. Aatrey emphasized that this strategy will remain a cornerstone of the company's approach, especially to attract both sellers and small enterprises in smaller towns and rural areas, where there is a burgeoning cohort of new online shoppers.

The company aims to develop chat and voice-activated AI solutions to ease shopping for newcomers, particularly targeting buyers in rural regions who may lack online shopping experience. These AI innovations will streamline product discovery, ordering, and payment processes, thus enhancing customer satisfaction.

Furthermore, Meesho is advancing its logistics platform, Valmo, to minimize delivery expenses and expedite shipments. Acknowledging logistics as a fundamental area for business growth, the enhancement of delivery and supply chain logistics will allow Meesho to cater to a larger user base while maintaining cost efficiency.

Beyond technology, Meesho is set to incorporate financial services, including buy-now-pay-later features for customers and short-term credit for vendors. According to CEO Aatrey, these financial initiatives could represent a sustained avenue for improving the company's profit margins, mirroring strategies employed by leading global e-commerce firms.

Meesho is also eyeing entry into the grocery market, a fiercely competitive segment in India’s e-commerce landscape. By venturing into groceries, the company aims to augment its market presence and provide enhanced value to customers, fueling overall growth.

The company's revenue surged by 29.4% to 55.78 billion rupees ($622.96 million) in the first half of the fiscal year 2026, while losses were significantly reduced by 72.1% to 7 billion rupees, signaling a shift towards profitability. This performance underlines how Meesho's integrated strategy of AI, logistics, and financial services is beginning to yield successful outcomes.

With its upcoming IPO and ongoing investments in technology, logistics, and financial offerings, Meesho is poised to expand its transacting user base, which saw a 30% increase year-on-year as of September 30. By broadening its product range, enhancing deliveries, and integrating financial services, Meesho is solidifying its foothold in India's thriving e-commerce market.