Meesho’s Next Monetisation Engines

by · Inc42

SUMMARY

  • As logistics gains improve marketplace economics, Meesho is exploring new ways to generate revenue from its expanding consumer and seller ecosystem
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Meesho has spent much of its journey building scale in India’s value commerce market. Its low-cost marketplace model has helped it expand its reach beyond large cities, bring more sellers online and attract consumers looking for affordable products. But as the company moves towards its next phase of growth, the goalpost is shifting from acquiring users and expanding transactions to extracting more value from the ecosystem it has built.

Advertising is emerging as one of the key opportunities. With 284 Mn annual transacting users (ATUs) and 1.13 Mn annual transacting sellers as of Q2 FY27, Meesho has a large marketplace that it can potentially monetise through sponsored listings and other advertising products. The company expects advertising to become a more meaningful contributor to its revenue mix from FY28.

At the same time, Meesho is exploring newer business lines, including lending products for consumers and sellers, while expanding branded commerce through Meesho Mall and discovery-led shopping through content commerce. These initiatives could open up additional revenue streams, although their contribution to the company’s financials remains at an early stage.

The opportunity comes as Meesho makes progress on its marketplace economics. 

Its Q2 FY27 performance shows that the core marketplace is growing and its operating economics are improving. Revenue from operations increased 34% year-on-year to ₹4,119.9 Cr, while net merchandise value (NMV) grew 23% to ₹12,911 Cr. 

In the reported quarter, its contribution margin improved to 6% of net merchandise value (NMV), compared with 4.6% in the previous quarter and 3.3% a year earlier. Its marketplace adjusted EBITDA loss also narrowed to ₹130.5 Cr from ₹371 Cr in Q2 FY26. 

However, management cautioned that the 6% contribution margin recorded in Q2 FY27 should not be viewed as the new normal, as some of the logistics efficiency gains may be passed on to consumers and sellers to support growth.

The question, therefore, is whether Meesho can turn its growing consumer and seller base into higher-value revenue streams without compromising the affordability that underpins its marketplace.