Meesho pivots toward advertising and lending to drive revenue growth
Indian e-commerce firm Meesho is shifting its focus from user acquisition to monetization through sponsored listings, financial services, and diversified commerce offerings.
Meesho is transitioning its business model to focus on extracting higher value from its established marketplace. As of the second quarter of fiscal 2027, the company reported 284 million annual transacting users and over 1.13 million active sellers. The firm intends to scale its advertising business, with management expecting sponsored listings to become a meaningful contributor to revenue by fiscal 2028.
Operational metrics show growth, with Q2 revenue increasing 34 percent year-on-year to 4,119.9 crore rupees, and net merchandise value rising 23 percent to 12,911 crore rupees. While adjusted EBITDA losses narrowed significantly, management warned that recent contribution margin improvements driven by logistics efficiencies may be partially reinvested to maintain the platform's price-sensitive competitive edge.
Beyond advertising, Meesho is developing credit products for consumers and sellers in partnership with financial institutions. Analysts suggest that while these new revenue streams are necessary for long-term growth, the company faces the challenge of implementing monetization tools without alienating price-conscious consumers or disadvantaging smaller sellers who cannot afford higher advertising bids.