India's Value-Commerce Sector Grows Amid Decreasing Fulfilment Costs

The platform's logistics initiative, Valmo, has reduced average fulfillment costs to ₹43.08 per order and cut shipping times by 15%, contributing to a 24% year-on-year growth in order volumes. The company has reported a 15% reduction in average shipping times, contributing significantly to customer satisfaction and repeat business. Value-commerce, in particular, is projected to expand by 30-35%.

India's value-commerce sector is experiencing robust growth, driven by decreasing fulfilment costs and a surge in order volumes. Meesho, identified as India's largest e-commerce platform, plays a pivotal role in this expansion with a user base of approximately 198-199 million and having processed 1.8 billion orders. The average fulfilment cost per order stands at ₹43.08, showcasing the platform's efficiency in managing logistics and delivery.

Meesho's Strategic Logistics Initiative: Valmo

Central to Meesho's operational efficiency is its logistics initiative, Valmo. Through aggressive bargaining with logistics partners, Meesho has successfully reduced costs and enhanced the speed of delivery. The company has reported a 15% reduction in average shipping times, contributing significantly to customer satisfaction and repeat business.

“Our focus on logistics and supply chain readiness has been instrumental in achieving these efficiencies,” said a spokesperson from Meesho.

The logistics initiative not only supports cost savings but also drives quicker commerce operations, which have registered a 120% year-on-year growth.

Rising Demand from Tier II and III Cities

A significant portion of Meesho's orders, 55%, originates from Tier II and III cities, highlighting the increasing penetration of e-commerce in less urbanized areas. Tier II cities have seen a 28% increase in order volumes, while Tier III towns have experienced a 23% growth. This trend is indicative of rising rural engagement, which is supporting overall e-commerce demand in India.

The growth in these regions is fueled by enhanced supply chain readiness and smarter demand forecasting, enabling faster and more reliable delivery services.

Sector-Wide Growth in India's E-commerce

The entire e-commerce market in India is on the verge of substantial growth, with the Gross Merchandise Value (GMV) expected to surpass Rs 1.15 trillion. This marks the strongest performance in three years, underscored by a 24% year-on-year growth in order volumes.

Value-commerce, in particular, is projected to expand by 30-35%. This growth is powered by significant advancements in various sectors, including fashion, beauty, and home segments, each witnessing over 20% growth. Additionally, electronics and mobile devices have seen approximately a 10% increase in demand.

Horizontal Marketplaces and Quick Commerce

Horizontal marketplaces are driving two-thirds of all e-commerce transactions, underscoring their integral role in the sector's expansion. Furthermore, quick commerce platforms have seen a remarkable 150% year-on-year growth, reflecting consumers' increasing preference for swift delivery services.

The combination of these factors paints a promising picture for India's value-commerce sector, as it continues to evolve and adapt to the changing needs of its vast and diverse consumer base.