Meesho rejects platform fees as AI costs weigh on margins
Indian e-commerce firm Meesho will forgo platform fees to maintain customer trust while pivoting to AI-driven logistics and new lending services to improve profitability.
Meesho has ruled out the implementation of platform or convenience fees, signaling a departure from the pricing strategies adopted by competitors such as Zomato and Swiggy. CEO Vidit Aatrey stated that while the company currently loses approximately 2.4 rupees per order, adding hidden checkout fees risks eroding long-term customer value. Instead, Meesho aims to achieve profitability through logistics efficiency and advertising revenue.
The company is increasingly relying on AI to manage operational costs, deploying custom language models to improve delivery address accuracy and fraud-prevention tools to reduce return rates. However, these technical advancements have led to a rise in infrastructure spending; server costs climbed to 2.3% of net merchandise value as the company increased its GPU footprint by 150%. Meesho plans to mitigate these costs by transitioning to open-weight AI models.
Financial diversification remains a key pillar of the company's growth strategy. Meesho is moving into consumer and seller lending, with the board approving a 400 crore rupee investment into its payments and loan underwriting units. Concurrently, the firm is shifting capital expenditure responsibilities for its Valmo logistics hubs onto third-party network entrepreneurs, aiming to keep its own direct asset spending limited.