Thanks to higher logistics and advertising expenses, leading e-commerce platform Meesho witnessed loss of Rs. 3,248 crore in the financial year 2022, an increase of 550 per cent from Rs. 499 crore that the start-up reported in the preceding fiscal year.
As per a report of The Financial Express, the leading business daily, the Bengaluru-based Meta-backed start-up’s advertising and promotion spends soared massively to Rs. 2,579 crore, – 508 per cent – an increase from Rs. 424 crore that the company spent in FY ’21.
Its total expenses in the year increased to Rs. 6,607 crore, up around 394 per cent from Rs. 1,337 crore that it spent in FY ’21. Nearly half of the costs came from logistics and fulfilment centres.
The company earns money by running advertisements, promotions on the home page, among other ways.
It is also being said that the concentration on non-metro cities has however resulted in the company’s low average order value (AOV). According to several analysts, its AOV stood at around Rs. 400 which compares with Flipkart’s roughly Rs. 3,000.
Vidit Aatrey-led Meesho now has about 70 per cent of its business coming from selling to customers (B2C) while selling to resellers, who eventually ship to customers, accounting for the remaining.
According to Tracxn data, Meesho has so far raised over US $ 1 billion and is valued at around US $ 5 billon. The company also aims to go public, after laying off about 450 employees in 2022 as it shut its grocery division.
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