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Meesho Joins ONDC; Plans to Compete with Amazon, Flipkart with Branded Products

Nearly 300 employees of Meesho have lost their job after the shuttering of the Meesho Superstore.

Following the e-commerce giant Meesho is now looking to join the government-backed Open Network for Digital Commerce (ONDC) and has started developing a new product called Meesho Mall, according to people familiar with the matter. ONDC is a freely accessible platform designed to democratise e-commerce. Unlike the platform-based model, it is not owned or controlled by a single entity.

The company will seek to partner with affordable consumer brands at Meesho Mall and is already in talks with some brands. The move is significant as the Bengaluru-based company typically focuses on off-brand segments and is targeting markets where the price is higher than convenience by focusing on customers spending less than Rs 500.

Meesho Mall will compete directly with Flipkart and Amazon. So far, Meesho has been competing with Shopsy, the social commerce app Flipkart launched last year. Competition has also intensified as Meesho starts to get 75 per cent of its business directly from customers.

The company did not respond to inquiries about Meesho Mall. Meesho is currently pitching to brands, according to some people familiar with the matter. Also, with this move, the company will focus on launching its private label, which is its long-term strategy.

“As ONDC is in its early stages, we are monitoring developments that are taking place and waiting for more details to emerge. However, we think this could prove to be the backbone of e-commerce in India in the same way that UPI is used for digital payments.” The SoftBank-backed unicorn is also in cash reserve mode, as it has directed its teams to reduce customer acquisition costs. The company currently has a cash burn of $35-40 million per month.

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