Previuosly, the only product driven way we push suppliers to get best prices is via the Price Reco tool. But only 16% of active suppliers use the price reco tool on a weekly basis and less than 4% of total recommendations & 15% of new listing recommendations get accepted. Even after this, 40% of the weekly pricing tickets were towards price reduction. So, clearly a lot of opportunity was left on the table.
For problem discovery, we undertook various initiatives -
Suppliers callings & surveys across size & age to understand their pricing behaviours
Internal data analysis to understand the opportunity and impact
Outside-in perspective from companies like PinDuoDuo, Flipkart, Amazon & Shopee to understand their initiatives towards lowering price
We come across 2 major problem areas, which restrict a supplier from providing their best prices:
#1 // Suppliers benchmark customer prices for their listing prices
The dominant behaviour among suppliers is to check through the prices of similar, well rated, products on Meesho app, via search, before deciding on the listing price of a product. However, the app price is an addition of supplier input price & zonal shipping costs.
Ideally, suppliers should remove the shipping costs, from previous experiences, for better benchmarking and higher orders. However, even suppliers who know that delivery costs are borne by the customer and know that delivery charge gets added, fall prey to the free delivery tag on app and ultimately benchmark their listing prices with customer prices. This results an even higher customer price.
#2 // Suppliers are unclear about meesho’s cost components
Holistic understanding about what aspects, of selling on meesho, a supplier is charged for - shipping, commission, returns, gst - and their rupee values is missing among suppliers, specially among the new ones. New suppliers come with their own understanding, developed via social circles & selling on other places. Most suppliers today develop this understanding over time while selling on the platform. Some still live with a flawed understanding of the cost structure.
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Problem Discovery