Meesho, the Bengaluru-based ecommerce marketplace, has announced a significant 47% year-on-year increase in operating revenue, reaching Rs 3,531 crore for the March quarter. This growth comes alongside a notable reduction in net losses, which fell to Rs 166 crore from Rs 1,391 crore in the same quarter last year, largely due to a high base effect from a one-time expense.
CEO Vidit Aatrey highlighted the company's extensive use of artificial intelligence in its operations, stating that over 70% of Meesho's code is now AI-generated. Aatrey noted that more than 75% of orders are driven by the AI recommendation engine, PRISM (Personalised Ranking and Intent Signal Module), which anticipates consumer needs before they are explicitly stated.
Despite the increased reliance on AI, Meesho has not realized significant savings in personnel costs. Instead, the company is leveraging AI tools to enhance productivity while maintaining current staffing levels.
Market Insights: In the past year, approximately 264 million Indians transacted on Meesho, marking a 33% increase, while the number of sellers on the platform rose by 87% to around 961,000. This underscores the potential depth of the Indian ecommerce market.
However, the company reported a 45% year-on-year widening of losses when excluding exceptional items, driven by increased spending on customer acquisition and technology infrastructure. The contribution margin also saw a decline, dropping to 4% from 4.3% a year prior.
Meesho's aggressive marketing strategy is evident, with advertising and marketing expenditures as a percentage of net merchandise value (NMV) rising to 2.1%, up from 1.5% the previous year. The adjusted EBITDA margin also widened to -1.7% from -1.3% in the fourth quarter of FY25.
Logistics and Operations: Following disruptions in the third-party logistics sector, Meesho's in-house logistics platform, Valmo, saw its share of total marketplace shipments decrease to about 50% during the January-March quarter, down from nearly 60% in earlier periods.
The company's last-twelve-month free cash flow stood at a negative Rs 633 crore, a decline from a positive Rs 591 crore the previous year, primarily attributed to elevated customer acquisition costs.
Meesho, backed by investors such as SoftBank Group and Elevation Capital, went public in December with a Rs 5,421 crore IPO. Following the announcement of its quarterly results, Meesho's shares closed 3.8% lower at Rs 196.50 on the BSE.
