New Delhi: E-commerce platformsAmazon and Flipkart are intensifying their efforts to attract shoppers in India’s smaller cities, but Meesho continues to hold a strong position in the value-commerce segment by focusing on affordable products, small sellers and low-cost deliveries.
While Amazon and Flipkart have built extensive warehouse networks, established brands and sophisticated delivery systems, Meesho has developed a different business model aimed at price-conscious consumers. Its strategy focuses on bringing affordable products to customers in Tier-2, Tier-3 and smaller cities, where demand for online shopping continues to expand.
Meesho’s advantage extends beyond low prices. Its large customer base, extensive seller network, product discovery features and logistics arrangements have created an ecosystem that competitors may find difficult to replicate quickly.
Meesho’s growing reach beyond major cities
Meesho has built its business around consumers who want affordable products without having to depend exclusively on established brands or premium online marketplaces.
The platform had 274 million annual unique transacting customers in the first quarter of financial year 2027. This represented approximately 27% of India’s internet users. Around 88% of its consumers were located outside the country’s eight largest cities, while its seller base stood at approximately 1.04 million.
These figures highlight the importance of smaller cities and towns in India’s online retail market. Consumers in these locations increasingly have access to smartphones, internet services and digital payments, enabling them to discover products and purchase goods online.
Meesho’s strategy also appeals to shoppers who prioritise affordability over rapid delivery or premium brand names. Its marketplace offers a wide range of clothing, household products, accessories and other everyday items at relatively low prices.
Ninad Karpe, founder and investor at Karpe Diem Ventures,that Meesho offers consumers in Tier-2 and Tier-3 markets products comparable to those available in larger cities, but at prices suited to their locations and budgets.
Why Amazon and Flipkart face a different challenge
Amazon and Flipkart are not new to India’s smaller markets. Both companies have invested substantially in logistics, fulfilment infrastructure and seller networks to expand their reach.
However, entering smaller cities does not automatically mean winning over consumers who have limited experience with online shopping or are particularly sensitive to prices.
That Amazon and Flipkart are expanding their value-commerce offerings alongside their conventional e-commerce and quick-commerce businesses. Flipkart has Shopsy, while Amazon operates Amazon Bazaar, which focuses on low-priced merchandise.
These initiatives allow the larger platforms to compete for customers seeking affordable goods. Yet, Meesho’s approach has been designed around attracting shoppers who may otherwise have limited participation in online retail.
For Amazon and Flipkart, the challenge is therefore not simply to make existing services available in smaller cities. They must also build shopping habits among new customers, provide an extensive assortment of inexpensive products and maintain delivery costs low enough to make small orders commercially viable.
Low prices are only part of Meesho’s advantage
Affordable products have helped Meesho attract customers, but industry experts quoted in the report argue that competitors can also reduce prices.
Meesho’s more durable advantage comes from the interaction between its customers, sellers, product selection, logistics network and recommendation technology.
As more consumers use the platform, sellers have an incentive to list their products there. A larger seller base expands the available assortment, making the marketplace more attractive to shoppers. Higher transaction volumes can then improve logistics efficiency and provide more information to personalise product recommendations.
This creates a cycle in which consumer growth supports seller participation, while a broader selection of products encourages further shopping.
The platform also relies on discovery-led shopping. Instead of always searching for a specific item, customers may browse recommendations and discover products they had not initially planned to purchase. This approach can be particularly effective when the marketplace offers a large variety of low-priced merchandise.
For Meesho, the combination of product discovery and affordability has helped establish a shopping experience that differs from conventional searches for established brands.
Zero commission is no longer an exclusive advantage
Meesho initially differentiated itself by allowing sellers to list and sell products without paying conventional marketplace commissions. This reduced one barrier for small manufacturers, traders and sellers who wanted to reach online customers.
The approach helped bring fragmented suppliers into digital commerce, particularly businesses that might not have been well served by traditional online retail models.
However, the competitive landscape is changing. Flipkart has promoted zero-commission selling to attract sellers, while Amazon has waived referral fees on products priced below ₹1,000.
As a result, Meesho can no longer depend on zero commission alone to distinguish itself from its larger rivals.
Its existing scale and operational structure may nevertheless provide an advantage. The report cites more than 274 million annual transacting users, over one million annual transacting sellers and 2.83 billion orders as of June 2026.
These figures indicate the size of the ecosystem Meesho has developed. Competing platforms may adopt similar pricing policies, but replicating the same combination of customers, sellers, order volumes and delivery economics could take considerable time.
Valmo helps keep delivery costs under control
Logistics is one of the most important differences between Meesho and conventional e-commerce platforms.
Amazon and Flipkart have extensive fulfilment centres, warehouses and delivery networks designed to serve a broad range of products and delivery requirements. Meesho, by contrast, operates as a marketplace that connects buyers and sellers rather than maintaining its own inventory and warehouse network in the conventional retail model.
Its logistics platform, Valmo, connects multiple logistics partners and coordinates different stages of delivery, including first-mile collection, sorting and last-mile transportation.
This asset-light approach allows the company to organise deliveries through a network of logistics operators instead of relying entirely on a vertically integrated infrastructure.
Citing an Ambit Capital analysis, provides the following comparison of logistics costs per order:
- Meesho: ₹39 per order in FY26, compared with ₹40 in FY25.
- Flipkart: ₹42–₹46 per order in FY25.
- Amazon: ₹53–₹57 per order in FY26, compared with ₹58–₹62 in FY25.
The figures show Meesho’s reported cost advantage, although the comparisons cover different financial years and should not be treated as perfectly like-for-like measurements.
The difference is particularly important for low-value purchases. When a customer buys an item worth only a few hundred rupees, delivery costs can account for a substantial share of the transaction’s economics.
A logistics system built around expensive products and rapid delivery may not be suitable for every low-priced order. Meesho’s model instead prioritises cost efficiency and a broad network capable of serving smaller markets.
Amazon and Flipkart retain significant logistical advantages of their own, but matching Meesho’s economics for low-average-value orders remains a separate operational challenge.
Profitability remains a major challenge
Despite its expanding customer base, Meesho still faces the task of building a sustainably profitable business.
That fulfilment fees account for approximately 91% of the company’s revenue, while advertising contributes the remaining 9%. It also notes that fulfilment income is largely pass-through in nature, while advertising offers a more direct opportunity to improve margins.
Advertising could therefore become increasingly important as more sellers compete for visibility on the platform. Sellers may pay to promote their products, while Meesho can use its technology and transaction data to improve product discovery and offer better tools to merchants.
The company could also use technology to help small sellers understand pricing, customer demand, product listings and delivery costs. Such support may be particularly valuable to manufacturers operating in smaller towns who have limited experience selling online.
However, increasing advertising revenue and improving operational efficiency will not automatically resolve every profitability challenge. The company must continue attracting customers, managing fulfilment costs and maintaining a competitive shopping experience.
Competition is likely to intensify
Meesho’s position in value commerce does not mean Amazon and Flipkart lack the resources to challenge it. Both companies have extensive logistics networks, established customer relationships and significant technological capabilities.
Their expansion into lower-priced products shows that affordability has become an important competitive battleground in Indian e-commerce.
The wider opportunity is also large enough to accommodate several platforms. As more consumers in smaller cities move towards online shopping, companies will compete on price, product variety, delivery reliability, seller support and customer trust.
Meesho’s immediate advantage lies in its experience serving price-conscious shoppers and its ability to process large volumes of low-value orders through a cost-focused model. Its next challenge is to translate that scale into sustainable profitability.
For Amazon and Flipkart, the task is to adapt their established businesses to the economics of value commerce without losing the strengths that have made their platforms successful.
India’s next phase of e-commerce growth may therefore depend less on which company has the biggest warehouses and more on which platform can serve new consumers affordably and efficiently. Meesho has established an important lead in that segment, but maintaining it will require continued innovation, disciplined costs and a business model capable of generating lasting profits.
