Meesho changes seller policy to attract more vendors as it takes on Amazon, Flipkart

Bengaluru: Meesho will bring down the payout cycle for sellers from 15 days to seven, the social commerce platform said on Tuesday. The company also said that it won’t charge sellers for order cancellations – either by self or automatic ones.

Payouts are payments made by an e-commerce marketplace to sellers after the sale happens on the platform.

The industry standard is 15 days.

Meesho said it was the first company to offer a seven-day payment cycle.

“The “7-Day Payments” feature ensures sellers are paid faster, which in turn, helps them reinvest money back into their business. Being capital efficient is crucial to their continued growth and success,” the company said in a statement.

Automatic cancellations happen when a seller runs out of a particular product.

Self-cancellation takes place when a seller cancels the order in case the right size or design is not available after an order is placed.

Sellers were charged 2.5% of the order product’s price, per day of delay till cancellation.

That means, if a customer placed an order for a product worth Rs 100 and the seller cancelled the order four days later, the seller would have been charged Rs 10.

The company said the new policy won’t affect the customer experience as it has “built robust data backed models.”

“With the new ‘Zero Penalty’ and ‘Seven-Day Payment’ initiatives, we are confident we will be able to further accelerate the trajectory of seller acquisitions and success on Meesho,” said Lakshminarayan Swaminathan, vice-president and general manager, supply growth, at Meesho.

Meesho is in the process of pivoting from social commerce to e-commerce as it attempts to take on bigger rivals Amazon India and Walmart-owned Flipkart.

The company has been able to attract many sellers as it has a zero-commission model – no commission will be charged to sellers after a sale happens.

Flipkart and Amazon have also started offering a zero-commission model for low priced products on their platforms.

Nearly 70% of all Meesho sellers hail from tier 2 cities such as Hisar, Panipat and Tirupur. On average, sellers on Meesho have seen their business grow by 80% within two years, the company said.

Following the rise of Meesho, Flipkart launched its own
zero-commission platform called Shopsy in July last year.

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