Meesho is set to intensify its investments in AI-driven features, following a notable rise in its transacting user base and purchase frequency attributed to tools like voice search and recommendation engines.
In the January-March quarter of FY26, Meesho's annual transacting user base surged by 32% year-on-year, reaching 264 million. The net merchandise value (NMV) also saw a substantial increase of 43%, hitting ₹11,371 crore. The company’s focus on smaller towns has contributed to this growth, as both new and existing customers engaged in repeat purchases.
According to Dhiresh Bansal, Meesho's Chief Financial Officer, the introduction of the AI shopping agent, Vaani, has been pivotal. Launched in Q4, Vaani has attracted over 1.5 million users in its first month and has improved conversion rates by 22% among its adopters.
Strengthening AI Integration
Meesho's recent shareholder communications reveal that more than 70% of its code is now AI-generated, facilitating quicker and more reliable product releases. The company is investing in autonomous software development systems where AI agents manage coding, testing, and deployment, allowing engineers to concentrate on more complex tasks.
Despite a significant reduction in losses—down 88% to ₹166 crore from ₹1,391 crore the previous year—Meesho's aggressive spending has impacted its margins. The adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) for FY26 widened to a loss of ₹1,178 crore, compared to a loss of ₹117 crore in FY25.
Investment Focus and Future Outlook
Meesho has designated FY26 as an investment year, highlighting increased customer acquisition costs, technology infrastructure investments, and logistics disruptions due to third-party consolidations. The company has shifted its logistics strategy towards its in-house platform, Valmo, for last-mile deliveries.
Advertising and promotional expenditures more than doubled year-on-year to ₹990 crore, reflecting Meesho's commitment to acquiring first-time e-commerce users. Investments in large language models and machine learning systems have also increased significantly.
Founder and CEO Vidit Aatrey emphasized the importance of these expenditures to tap into the next wave of online shoppers, particularly from smaller cities and vernacular-language markets. He acknowledged the challenges posed by macroeconomic factors but affirmed that Meesho would continue its aggressive investment strategy where returns are justifiable.
Aatrey stated, "India’s next 500 million consumers will shape the future of e-commerce in the country, and our mission is to evolve alongside them."
