Meesho's Vidit Aatrey charts a Pinduoduo-style playbook for India’s value ecommerce market

IPO-bound ecommerce major Meesho is counting itself in the leagues of Temu-owner Pinduodo, Shopee and the likes as it bets on its value proposition on affordability to mobilise more internet users.

"The three large emerging markets apart from India are generally China, Southeast Asia and Latin America. They are similar to India, and three have panned out exactly the same way. Steadily, about 60% of the entire market cap in ecommerce has been captured by value commerce players, and those are the names we have been tracking: Pinduoduo, Taobao, Alibaba, Shopee in Southeast Asia, Mercado in Latin America," Meesho Co-founder, Chairman, and CEO Vidit Aatrey shared with YourStory.

Meesho is set to launch its IPO next week, bringing massive gains for its founders and shareholders, as it makes India's first ecommerce public market debut.  The IPO price range is set between Rs 105 per share and Rs 111 per share, valuing the offering at Rs 5,421.05 crore, around $5.6 billion at the upper end of the range.

The company has built its hyper-value commerce model by closely studying ecommerce behaviour in China and other emerging markets. The company draws heavily from platforms like Pinduoduo, which today has a market cap of $164.4 billion.

Aatrey highlighted the company’s focus on reducing average order values (AOVs) as a core part of its approach. “In emerging markets, consumers tend to buy frequently in small amounts. In India, organised retail scaled to a billion consumers when FMCG companies introduced one-rupee sachets, lowering AOV and enabling mass adoption,” he said.

To achieve similar behaviour online, Meesho is focused on making the platform more efficient, in everything from logistics operations to improving customer support and server operations.

These efficiencies allow lower price points to become viable, expanding the range of products consumers can access. It sees its accomplishments in scaling the Home & Kitchen category to transfer to other low-AOV categories like kids and baby, beauty and personal care, grocery, accessories, and stationery, etc.

Aatrey notes that this strategy mirrors patterns seen in China, where value commerce platforms captured significant market share by combining low order values with high operational efficiency.

In an interview with YourStory, Aatrey talks about the company's drive to keep average order values lower, tracing the footsteps of value-focused ecommerce giants and how it sees competition, both human and AI.

Edited excerpts:

YourStory [YS]: In Asia, the ecommerce story looks very different from the West. How do you see Meesho evolving when you look at players like Pinduoduo, Alibaba, and the likes? How do you envision Meesho’s size, shape, and trajectory?

Vidit Aatrey [VA]: Essentially, in emerging markets, value-focused platforms eventually reach almost all internet users as affordability resonates strongly in these regions. Our transacting user base is around 23 crore and is still growing at about 30% year on year, showing that more people are coming online at a fast pace.

These platforms also become efficient in logistics, and that’s the gap we’re closing with Valmo. Our logistics cost is currently three to four times higher than in China, because of which, many products aren’t feasible here yet.

Across these markets, the key profit pools are logistics, advertising, and financial services. We already have the first two, and we’re now exploring financial services. Once you operate at a population scale, you sit on unique data about consumers and businesses, which allows you to build products others can’t.

YS: The new businesses, like fintech and a few others, are currently grouped under new initiatives. How significant will these new initiatives be going forward?

VA: These new initiatives are essentially experiments. At this stage, the priority is to get the product and the business model right and validate all assumptions before scaling. So for now, we are keeping investments limited. I can’t say exactly when we will begin to scale, but the intention is to do it as soon as we’re confident in the model.

We’ve followed this approach before. Three years ago, we launched Valmo. Once the model was set, we scaled it quickly. The same happened with Content to Commerce, which started two years ago and rapidly expanded once the model proved itself.

YS: Currently, Valmo is doing about 60% of the logistics. Do you foresee this going up to 100% and bringing it completely in-house? What is the rationale behind not scaling it beyond this, and what is the outlook for its growth?

VA: Actually, I don't foresee it scaling to 100% anytime soon because Valmo keeps the entire ecosystem competitive by forcing every other player to also reduce cost. Other players also continue to push themselves in making their costs more efficient. Our goal is to keep driving competition in the ecosystem to keep bringing the price down.

If there are not enough logistics partners, or they are not incentivised to keep reducing the cost, then maybe Valmo will keep rising, but we don't see that happening anytime soon.

Q: In Horizon 2 (new initiatives), you’ve highlighted a low-cost, hyperlocal network for daily essentials. Right now, the model is convenience-focused, and last-mile delivery remains expensive. How do you envision reducing the cost of hyperlocal delivery?

VA: Our structure will be very different from the typical convenience model, targeting one-day delivery. The idea is to build a lean supply chain that sources directly from manufacturers or producers within the same district and then uses a community-aggregated model.

We run it like a B2B supply chain up to an aggregation point near the customer and then complete the last mile, dramatically lowering costs. There are precedents for what we’re building. In China, community group buying companies operate at logistics costs nearly one tenth of national-level platforms, making low price points viable. We’re building this within Valmo, but it is early and experimental.

It’s also essentially the same grocery model we’ve been running for five years. We’ve treated it as a long-term opportunity, learned and improvised every year, and will keep investing in it under Horizon 2.

YS: Flipkart recently said it is not going to charge any commissions for products less than Rs 1,000. How do you see competition playing out in the near term with other ecommerce platforms adopting zero commission models for low-value products?

VA: In a large market like this, it’s natural for others to try entering & test zero commission models; many have experimented over the last five years.

Despite that, we’ve continued to grow much faster than anyone else by strengthening the value proposition, improving the platform, investing in AI and tech, and driving more efficiency.

I don’t expect competition to reduce, but as our flywheel keeps getting stronger, we believe we will retain the majority share of this market.

YS: How are you thinking about agentic AI? Do you feel unbranded marketplaces like Meesho have an inherent advantage?

VA: It’s still very much an experimentation phase, and we’re approaching it the same way at Meesho. The space is in its early stages, and globally, a large share of commerce hasn’t shifted to this model, with no inflexion point seen in any market yet.

We’re focusing our investments on building our in-house chat and voice AI agents to support the next few hundred million less tech-savvy users to help them transact more easily.