Indian ecom penetration could mirror WhatsApp user base

As ecommerce platform Meesho’s much-anticipated ₹5,421 crore IPO opens, the firm’s Cofounder and Whole-Time Director Sanjeev Kumar talks about the opportunities and challenges in smaller cities and towns in a video interview with Surajeet Das Gupta.

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You have said that Meesho has merely touched the surface of the huge potential of ecommerce in smaller cities and towns in India. Can you elaborate?

= In China or Indonesia, the number of ecommerce users tends to be similar to the chat app subscriber base. A good parallel in India would be the WhatsApp base of 800 million users. There is no reason why India’s ecommerce penetration should be very different from these countries and more so, as they are more value-seeking users in India compared to other countries.

Today, currently we are at 234 million transacting customers who have placed at least one order in the preceding 12 months and that number has grown 30 percent year-on-year. And we have invested in growth through aggressive marketing expenses, which has led to an increase of 54 percent in terms of orders this year in the first half of the financial year, and a 44 percent growth in net merchandise value (NMV).

Substantial portion of the IPO proceeds, according to your document is for investment in technology and technology infrastructure. That seems to be unusual for startups in ecommerce. Why is it so?