Meesho's ‘Value-Led Apparel’ surge fuels 'Bharat' e-retail growth
17 November 2025, Mumbai
New reports solidify Meesho's dominance in India's value-commerce segment, driven largely by the massive growth in the fashion and apparel category. As the overall e-retail market expects over 20% CAGR growth, Meesho is strategically channeling this expansion by catering to the affordability-driven demand from non-metro markets.
Tier-2+ Towns dictate fashion trends
The platform’s user base surge—hitting 175 million annual transacting users in 2024, up 25%, is predominantly fueled by Tier 4 and smaller towns. Categories like fashion, beauty, and personal care saw a cumulative 70% year-on-year order growth in 2024. This trend signals that "Bharat" (small-town India) prioritizes value-driven, low-priced fashion, a segment Meesho targets with its zero-commission model for sellers. The company, founded in 2015, began as a social commerce reseller model but has evolved into a direct marketplace, recording 1.83 billion placed orders in FY25, the highest in India.
Operational Efficiency: The 'Everyday Low Price' engine
Meesho's asset-light model and proprietary logistics arm, Valmo, are crucial for maintaining its "everyday low prices" strategy, a key differentiator against rivals like Amazon and Flipkart. Average order value (AOV) has declined to ₹274 in FY25, yet cost efficiency has been achieved, with fulfillment cost per shipped order dropping to ₹43.08 in the same period. This scale-driven efficiency is vital, particularly with challenges like high Cash-on-Delivery (CoD) rates (around 75% of shipped orders in Q1 FY26) which increase operational friction.
This focus on cost and scale is positioning Meesho, which achieved positive free cash flow of ₹1,032 crore in FY25, for a prospective IPO.The company is planning to raise an estimated ₹4,250 crore via fresh issue.
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