Launched in 2015 by Vidit Aatrey and Sanjeev Barnwal, two graduates from India’s prestigious engineering institute IIT Delhi, social commerce startup Meesho now looked beyond its home turf and extended its presence to the Southeast Asian market. The Bengaluru-based company, backed by social media giant Facebook, officially launched its service in Indonesia earlier this year after a soft-launch last December to test the water in the largest internet economy across the region.
Three months into its initial landing, Meesho has hired a 50-member team in sales and marketing roles in Jakarta, while its technology and engineering needs are being fulfilled by its Indian teams.
In August last year, the company raised USD 125 million led by Naspers with participation from existing investors such as Facebook, SAIF, Sequoia Capital, Shunwei Capital, RPS, and Venture Highway among others. The four-year-old startup has raised USD 190 million to date and claims over two million resellers on its home platform.
We got in touch with Prateek Agarwal, vice president, International business at Meesho to understand the drive and vision behind its launch in Indonesia.
“We are expecting to work with around one million resellers in Indonesia within a year. In India we were able to get two to three million resellers in three years, so we should be able to see at least half of that success here,” Agarwal told KrASIA.
The following interview has been edited for brevity and clarity.
KrASIA (Kr): What do you make of social commerce in Indonesia?
Prateek Agarwal (PA): Broadly speaking, the problems that we are trying to solve as well as the opportunities we are chasing in India are in Indonesia as well. Although, social commerce in Indonesia is happening at a much larger scale than in India. By their very nature, Indonesians are extremely social. I have been here for five months now and I have come to realize that the sentiment of being part of a community or a certain social group is way more than what it is back in India. This also reflects in their macro numbers, like Indonesia ranks 4th in spending time on social platforms globally.
Social commerce as behavior is much more mature here than what it is in India. People spend more time on social platforms. That means you have more touchpoints with customers. Secondly, the average disposable income of Indonesians is more than India’s. The tendency to do impulse buying is stronger than in India.
However, the resellers face the same problem that they face in India. So we are confident that we will get a product-market fit quite quickly.
Kr: How long did it take to execute the launch including the planning?
PA: We have been thinking of launching in Southeast Asia for some time now. After considering other markets such as the Philippines, we zeroed in on Indonesia due to its similarities with India. Once that was decided it didn’t take us too long to set things up. Coming to Jakarta and finally launching it took just 45 days.
Kr: What sort of adaptations did you make for the Indonesian market?
PA:At Meesho, we are building out the same model that we have in India. Obviously, we had to localize it a bit. The way logistics and payments work here is slightly different. We had to translate the app into the local language.
We made some tweaks in three spaces, a standard for launching in any market when it comes to online commerce. From the app perspective, one is language, then logistics, and lastly payments.
Since Indonesia is a group of islands, the logistics infrastructure in Indonesia is different from what it’s in India. Because the underline geography is different so the infrastructure that is built for it is also different. Hence, we had to tailor our system accordingly.
We had to make adjustments in managing payments as well. In India, we have UPI (Unified Payments Interface), net banking, debit and credit card payment. But these payment modes don’t have a very deep network here. Debit and credit card penetration is fairly low and people don’t use net banking very often. We have to integrate to alternate modes of digital payment. There is something called virtual banking and pay at retail, which we incorporated into our system. Similar to India, Indonesia is a very cash-heavy economy.
Kr: How is the local competition? Do you think players like Tokopedia, Shopee, and Lazada are strong opponents to you?
PA:Surprisingly, there is not much competition here. When we researched this market, we didn’t come across anybody who does what we do. There are a few small players who have started in the last six months, but in just three months we have become the largest social commerce player here—largest in the sense of most downloaded social commerce app. There is no competition which is really big here.
We don’t see Tokopedia, Shopee, and Lazada as the competition at all. They belong to a different space altogether. The transactions for them happen on their own platforms. For us, transactions happen on social platforms that are executed by individuals. These are two, very different behaviors. The fact that they have certain social commerce features indicates that there is a demand for social buying in the market. But these platforms don’t focus on resellers, they largely focus on the buyer. Our entire business revolves around providing solutions for the reseller which is indirectly transferred to their customers.
Kr: What were the learnings from the home market that you implemented in Indonesia?
PA:Our India business has been largely successful because we have always been focused on customers and trying to solve resellers’ problems. Over the last three years, by making a lot of mistakes and experiments we have come to understand how to provide a perfect and seamless experience to our resellers.
Our framework for Indonesia is very similar. Our research showed the potential users in Indonesia face almost similar problems that our customers in India face.
We wanted to be in an emerging market where you have people looking for a secondary income source, like women who stay at home, or people with an entrepreneurial mind. The learning curve in growing the business here will not be as high as it was in India. There [in India] we had to run experiments and make mistakes and then we tasted the success. Because of our past mistakes and learnings in India, we know the do’s and don’ts to implement in this market.
Kr: How is the business in India as of now? Is WhatsApp payment going to help you in any way?
PA:The India business continues to flourish. We are riding on a massive wave of people wanting to become resellers. We are solving problems for users who have not been exposed to or don’t trust conventional e-commerce.
Digital payment is at the heart of online commerce and all our social selling happens over WhatsApp. When WhatsApp makes this more convenient between two people, we definitely think this is going to be a big catalyst for our business.