The department sent a “final reminder”, dated January 21 this year, to the Bengaluru-based company, seeking its response to a notice for alleged non-compliance that was first sent to Fashnear Technologies, the parent of Meesho, on December 31, 2021. In the January note, the department said if Meesho didn’t respond to the follow-up queries within a week, it would be “constrained” to move court. ET has reviewed the notice which also mentioned previous incidents of alleged non-compliance of metrology rules by the SoftBank and Meta-backed company.
ET has learnt that Meesho had at least once last year paid a fine of Rs 75,000 for the alleged non-compliance.
Meesho is a law-abiding company and is committed to complying with the laws of the country, the company said in an emailed statement to ET. “We are cognisant of the requirement of displaying country of origin and our products across categories display the same,” it said, but did not respond to ET’s specific queries on the notices sent by the Department of Legal Metrology.
The government had in 2020 said that etailers
must show the country of origin for products and other information such as the MRP and seller details on their platforms. The amount of the fine, though, is relatively small for a company like Meesho, which has a monthly cash burn of around $40 million.
The rule on country of origin had become a bone of contention during the India-China border tension in 2020. The department
had fined Amazon India in 2020, in one of the first such instances of non-compliance of the rule.
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The notice sent to Meesho had screenshots of some of the product listings on the platform to show that they had inadequate details.
To be sure, bigger etailers like Amazon India and Walmart-owned Flipkart had also faced the task of updating their existing listings as well as ensuring new products are listed with adequate information, especially on country of origin. The government had held several meetings with top etailers to inform them of its stand, which also included that this rule may give a boost to home-grown products instead of goods fully made abroad.
According to a recent survey by LocalCircles, a community social media platform, one in every two consumers who shop online typically cannot find the MRP and country-of-origin information. Also, four in five ecommerce shoppers claimed that they could not find the best-before dates of a product. LocalCircles said it had received screenshots from consumers on these issues which were being raised with the government as well.
Meesho started as a social commerce startup with the reseller model, but has undertaken a major pivot to direct-to-consumer ecommerce and is now trying to compete with the likes of Amazon India and Flipkart. Its monthly spending has steadily gone up since it announced plans to take on existing biggies in the sector.
Meesho has been in talks with several investors for a new round of financing over the past few months, but those are yet to fructify in a deal. It last
raised $570 million in a funding led by US asset manager Fidelity and Eduardo Saverin’s B Capital, following which its valuation more than doubled to $4.9 billion in less than six months.
ET reported on March 22 that the company
had started work on rebranding itself to tap into a wider set of users, especially male. The company so far has been focused on female users.
