Meesho hits $6.2 bn GMV run rate, to grow 26% annually till FY31: CLSA

E-commerce company Meesho has reached a gross merchandise value (GMV) run rate of $6.2 billion for FY25, solidifying its position as the country’s third-largest platform by GMV. A report by brokerage firm CLSA projects the company will grow at a 26 per cent compound annual growth rate (CAGR) through FY31.

 

CLSA expects Meesho to grow its share of India’s e-commerce market from 8.5 per cent to 10 per cent over the next six years, driven by strong adoption in smaller cities, a capital-light operating model, and a focus on affordability.

 

Meesho’s gains come as incumbent players such as Flipkart and Amazon have seen slight declines in market share, according to the CLSA report.

 

 

India’s e-commerce market is led by four players: Flipkart, Amazon, Meesho, and Myntra. Over the past four years, Meesho has increased its market share from the low single digits to 8.9 per cent as of 2024. In contrast, Flipkart’s share slipped from 33.7 per cent in 2020 to 32.1 per cent, while Amazon declined from 30.5 per cent to 28.3 per cent over the same period, according to the report. Myntra’s market share has remained flattish during the same period.

 

India’s e-retail market is projected to triple to $170–190 billion in gross merchandise value (GMV) by 2030, owing to an expanding shopper base and newer business models, according to a report by Bain & Company and Flipkart. The report highlighted India’s position as the world’s second-largest e-retail shopper base, with over 270 million online shoppers in 2024. The market, currently valued at $60 billion, has slowed to 10–12 per cent growth in 2024 from over 20 per cent in previous years due to stress in consumption and discretionary spending owing to macroeconomic headwinds.

 

The CLSA report said Meesho is the market leader in order count in India, with an order market share of 37 per cent for 9MFY25 and the third-largest e-commerce platform by GMV. It is expected to support the increasing penetration of retail e-commerce.

 

The platform is averaging 4.9 million orders per day and 187 million annual transacting users.

 

“More than 85 per cent of Meesho’s users are from Tier-II towns or beyond, where it can generate demand and supply profitably at an average order value (AOV) of less than $3 through a combination of its optimised logistics platform Valmo, localised content, and affordable price points,” said the CLSA report. “Meesho utilises one of India’s largest tech and AI teams to support discovery and routing, and manages any platform misuse.”

 

While Meesho leads in order volume, it lags behind Flipkart and Amazon in gross merchandise value due to its limited presence in high-ticket categories like electronics and smartphones, as well as a lower share of premium-branded products.

 

The CLSA report said Meesho is a low-cost, large-assortment e-commerce platform that does not charge commissions to sellers. Its model is unique in India but shares similarities with low-cost e-commerce models such as Pinduoduo, Mercado Libre, and Shopee. Meesho is a pure third-party platform with no inventory or own brands, and it has negative working capital. “It is 36 per cent larger than Flipkart (Walmart) and 48 per cent larger than Amazon on orders per day, but still trails these two on GMV largely as it does not operate in electronics and mobiles and has lower salience of premium-branded products,” said the CLSA report.

 

As of FY25, with an average order value of Rs 315–350, the company earns revenue of Rs 82–85, consisting of ad revenues and logistics and shipping revenue. Meesho does not charge any commission to the seller.

 

A key driver of Meesho’s cost efficiency is its in-house logistics arm, Valmo. Meesho has reduced its fulfilment cost per order from Rs 77 in FY23 to Rs 60–65 currently, according to CLSA.

 

Meesho has been cash flow positive for the past five quarters, having generated a cumulative $118 million between Q2FY24 and Q2FY25.

 

In future, Tier-II cities are expected to be the key driver of overall e-commerce growth, and this may give an edge to Meesho. As per Ecom Express estimates, the share of Tier-II city shoppers as a percentage of overall online shoppers is set to rise to 63 per cent by FY29 from 57 per cent in FY24. GMV for Tier-II cities is expected to grow at a 24 per cent CAGR in FY24–29, with shipments for Tier-II cities growing at a 35 per cent CAGR.

 

The CLSA report also said that Meesho has the highest app engagement time of any shopping app in India at almost 500 seconds per day, nearly 20 per cent higher than Flipkart and Myntra, which may largely be a function of its focus on discovery over search. Meesho generates 14 billion daily catalogue views for 59 million user-generated content.