For years, people questioned: “How does Meesho make money if they charge sellers 0% commission?” The assumption was that if you don’t tax the transaction, you don’t have a business. The RHP dispels this myth.
The zero-commission policy wasn’t the revenue model – it was the bait. By removing fees, Meesho gathered India’s most fragmented and valuable asset: 7,06,471 active sellers. These are mostly small sellers dealing in unbranded and regional goods – a significant segment accounting for over 75% of India’s retail expenditure.
Once Meesho secured this vast supply, it activated its actual profit engine:
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Commission (0%): The lure that built the castle.
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Fulfillment: Making money through shipping.
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Advertising: Making money by offering visibility.
The data confirms this pivot is working. In the last six months alone, for every Re 1 a seller spent on ads, they generated Rs 13.55 in sales – an exceptionally high return. This shows Meesho has successfully transitioned from a struggling retailer to a mature ad-tech platform that shields itself from the razor-thin margins of selling cheap clothes.
And perhaps, the biggest surprise in the filing is the rapid growth of “Valmo”, Meesho’s in-house logistics platform.
Think of it not as a fleet of trucks and warehouses owned by Meesho but as a smart software brain that manages other people’s trucks and warehouses. In FY23, Valmo handled a mere 1.83% of shipped orders. Fast forward to the six months ending September 30, 2025, and that figure has skyrocketed to 64.52%.
This is where the “risk” factors are turned on their head. The RHP notes that 45.35% of Meesho’s sellers are concentrated in just three states: Gujarat, Uttar Pradesh, and Delhi. But because sellers are densely packed in these areas, collecting parcels becomes highly efficient. It is this density that enables Valmo to operate at a cost 0.5-11% lower than its major rivals, according to RHP claims. Consequently, what appears to be a geographic risk actually becomes the secret weapon keeping Meesho’s prices low.
