New Product Pricing

Enabling lower prices for new listings on the platform

Riya Singh

Context & Objective

Price reductions have had a multiplier effect on Meesho’s volume growth over the last 2 years. And a large part of this was driven by structural cost reductions in business model. Aim is to make Meesho structurally the lowest cost channel for suppliers to sell online. An analysis of Mar’22 uploaded products reveals that 55% of the uploaded PIDs underwent a ~11.7% price drop in a 3 month period, indicating that one area where we haven’t made much progress is on extracting the best input prices from suppliers.

Product Price Components

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Higher prices at listing → Lower PID ranking → Lower orders → Bad supplier experience →lower motivation → Lower listings → Lower earnings

Breaking this down into existing & new suppliers, we find that new suppliers’ new listing price goes down by ~15% in 6 months and existing suppliers’ new listings price goes down by ~7%. This is in line with the fact that new suppliers are less aware about various platform costs and they build in buffers at a higher level to account for any unwanted costs that might creep up while working with Meesho.

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